Magazine article Management Review

How a Winning Strategy Helps Pay the Rent

Magazine article Management Review

How a Winning Strategy Helps Pay the Rent

Article excerpt

When you think of hot industries, furniture rental may not be among the first to come to mind. Surprise: It's a $5 billion industy that's currently growing at a rate of 15 percent a year. Actually, furniture rental is only part of the industry, known as rent-purchasing. It also includes appliances and electronics (televisions, stereos, home computers). While many rental-purchasing chains consist of perhaps a dozen stores, others, such as Erie, PA-based Rent-Way; are expanding rapidly: Rent-Way acquired DAMSL Corp. chain in 1993, doubling its outlets from 20 to 40. The acquisition this July of McKenzie Leasing Corp. raises the number of Rent-Way outlets to 87. Rent-Way has stores in Pennsylvania, New York, Ohio, Florida, Illinois, Indiana, Michigan, and New Jersey.

Rent-Way's growth stems from more than just shrewd M&A activity. "We want to maintain a reputation as a company that provides consistently high-quality service," says President and CEO William E. Morgenstern. "And we want to carry that reputation to all our stores."

Profile of the Rental-Purchase Customer

People who have minimal credit or cash on hand will often rent furniture instead of buying it outright. With limited resources, they view the option of renting by the month or even by the week as giving them more flexibility than a permanent purchase. People who relocate frequently are also prime rental candidates. Sometimes, people who own vacation homes that they use only part of the year will furnish their homes during those months with rental pieces. Most people rent electronics and major appliances, says Morgenstern; furniture constitutes only one third of rentals. Some people will rent an item (such as a television) to test it before they make a purchase.

Going Beyond the Basics

"People who want to rent furniture have plenty of places to choose from," he notes. "With close to 8,000 rental-purchase outlets across the U.S., it's a competitive market. The successful company has to be able to provide something above and beyond what everyone else has." Rent-Way's "Welcome, Wanted, and Important" program is one element of its strategy for addressing this issue. "We think it's critical that our customers feel satisfied by the products we offer and the treatment they receive," says Morgenstern. In most service industries, customers who have limited purchasing power are often viewed pejoratively. Rent-Way puts all its entry-level employees through an intensive 13-week program that puts a strong emphasis on customer service. "We want our people to be able to work with customers to solve problems," Morgenstern explains. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.