Consumer Product Rental
Brief Excerpt from Industry Overview Chapter:
Companies in this industry rent personal and household goods, primarily for short periods but also under longer-term arrangements. Major companies include Aaron's, Netflix, Outerwall, and Rent-A-Center (all in the US) and Home Essentials (Hong Kong), LOVEFiLM/Amazon (UK), TSUTAYA (Japan), and TalkTalk TV (UK).
The global rental and leasing industry has focused on emerging economies for expansion. China is an important market for rentals because of the growth of disposable income among the middle class. Other emerging markets include the Middle East, Brazil, and Eastern Europe.
In the US, the consumer product rental industry includes about 21,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $22 billion.
Examples of products rented by companies in the industry include consumer electronics and appliances, DVDs, formal wear, home health equipment, and recreational goods.
Demand is driven by personal income and the timing and popularity of new movie releases. The profitability of individual companies depends on the right merchandise mix and inventory financing costs. Large companies have advantages in economies of scale in purchasing, distribution, and advertising. Small companies compete effectively by providing superior customer service and catering to local demographics. More than 80% of companies have fewer than 10 employees. The US industry is concentrated: the largest 50 companies account for about 70% of industry revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major services include renting DVDs (about 35% of revenue); home health equipment (20%); and consumer electronics and appliances...