Rent-to-Own – Silver Lining in Recessionary Clouds
Consumers may be buying less these days but they still want to furnish homes and apartments with necessities. Many would argue that TVs and computers are not necessary. But refrigerators, beds and basic tables and chairs often cost more than consumers can pay out at once. And with new limits on credit cards, shoppers are turning to retailers who often do well during recessionary times: rent-to-own stores. This business sector is often chastised along with the payday loan industry as being predatory but they fill an important and growing niche.
A recent article in U.S.A. Today noted that two major chains, Aaron’s and Rent-A-Center are expanding in this down economy. While consumers with household incomes exceeding $50,000 haven’t traditionally comprised a large part of the customer base in this industry, that demographic appears to be visiting rent-to-own stores more frequently.
This trend also points to an opportunity that many traditional retailers have tapped into lately – letting consumers know that they can return products, even white goods like refrigerators, if their employment status changes.
These days, part of making the sale is all about marketing your flexibility as a retailer and any new financing options that might be open to consumers. It’s also about targeting new demographic groups who are shopping in different venues.[Source: O’Donnell, Jayne. Consumers turn to rent-to-own stores in rickety economy, USA Today, 7.9.09]