Consumer Product Rental
Description
Companies in this industry rent personal and household goods, primarily for short periods but also under longer-term arrangements. Major companies include Aaron's and Upbound (both in the US), along with Cinema Paradiso Rental (UK), Furlenco (India), Home Essentials (Hong Kong), Lyght Living Furniture Leasing (Germany), and TSUTAYA Store (Japan).
The global rental and leasing sector has focused on emerging economies for expansion. The market is expected to reach about $260 billion in 2034, with a compound annual growth rate (CAGR) of 8%, according to the Business Research Company. 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, India, Brazil, and Eastern Europe.
In the US, the consumer product rental industry includes about 20,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $20 billion. Examples of products rented by companies in the industry include consumer electronics and appliances, DVDs, formal wear, home health equipment, and recreational goods.
COMPETITIVE LANDSCAPE
Demand is driven by personal income. 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. The US industry is concentrated: the 50 largest companies account for about 60% of industry revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major rental product categories include household type appliances (about 15%); home health care equipment (about 15%); social events equipment (about 15%); and home furniture and accessories (about 10%). Other products rented include formal wear and costumes, party supplies, and recreational equipment.
Physical DVD rentals continue to be popular despite the increased use of digital and streaming content. Video stores used to dominate the segment, however other methods of distribution, including mail and kiosks, now account for the majority of physical DVD rentals. Movie studios generally release a movie as a video during an exclusive "distribution window." The distribution window has shifted over time, with movies typically now being available for digital download at the same time or before a DVD release. Movie studios have also been shrinking the period after the theater release to better capitalize on the strong demand for content.
Rental of consumer electronics, furniture, and some home health care equipment is on a contract basis, usually week-to-week, where the consumer, such as a student or temporary worker, either wants the item for a short period, or prefers to pay week-to-week on a rent-to-own basis. The rental company retains title to the merchandise during the rental term. Only about 25% of initial rental agreements are taken to full term. To cover relatively high operating expenses, rental purchase agreements generally charge higher amounts than purchase plans. Tools, formal wear, and party supplies are generally rented for only a short period; frequent turnover on such items is necessary to be profitable.
Many rent-to-own companies have large automated distribution facilities that store merchandise before delivery to local stores. Furniture and appliance rental companies usually have their own truck fleets to deliver merchandise, both to stores and to customers.
The global rental and leasing sector has focused on emerging economies for expansion. The market is expected to reach about $260 billion in 2034, with a compound annual growth rate (CAGR) of 8%, according to the Business Research Company. 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, India, Brazil, and Eastern Europe.
In the US, the consumer product rental industry includes about 20,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $20 billion. Examples of products rented by companies in the industry include consumer electronics and appliances, DVDs, formal wear, home health equipment, and recreational goods.
COMPETITIVE LANDSCAPE
Demand is driven by personal income. 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. The US industry is concentrated: the 50 largest companies account for about 60% of industry revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major rental product categories include household type appliances (about 15%); home health care equipment (about 15%); social events equipment (about 15%); and home furniture and accessories (about 10%). Other products rented include formal wear and costumes, party supplies, and recreational equipment.
Physical DVD rentals continue to be popular despite the increased use of digital and streaming content. Video stores used to dominate the segment, however other methods of distribution, including mail and kiosks, now account for the majority of physical DVD rentals. Movie studios generally release a movie as a video during an exclusive "distribution window." The distribution window has shifted over time, with movies typically now being available for digital download at the same time or before a DVD release. Movie studios have also been shrinking the period after the theater release to better capitalize on the strong demand for content.
Rental of consumer electronics, furniture, and some home health care equipment is on a contract basis, usually week-to-week, where the consumer, such as a student or temporary worker, either wants the item for a short period, or prefers to pay week-to-week on a rent-to-own basis. The rental company retains title to the merchandise during the rental term. Only about 25% of initial rental agreements are taken to full term. To cover relatively high operating expenses, rental purchase agreements generally charge higher amounts than purchase plans. Tools, formal wear, and party supplies are generally rented for only a short period; frequent turnover on such items is necessary to be profitable.
Many rent-to-own companies have large automated distribution facilities that store merchandise before delivery to local stores. Furniture and appliance rental companies usually have their own truck fleets to deliver merchandise, both to stores and to customers.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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