Consumer Products Rental

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 8,400 consumer products rental companies in the US provide rental services for a wide variety of household and personal goods and items used for special events. Major rental or leasing revenue categories include home entertainment equipment; special events equipment; household furniture and furnishings; and formal wear, costumes, and accessories. Companies may also rent recreational goods, such as boats, skis, and bikes. Firms may also sell goods or allow customers to purchase goods during the rental period.

High Risk Customers

Many customers of consumer products rental providers can be considered high risk, and may be more likely to default or miss payments than traditional retail customers.

Competition from Traditional Retailers

Consumer products rental providers face competition from traditional retailers, such as consumer electronics stores, furniture stores, department stores, and mass merchandisers.

Industry size & Structure

The average consumer products rental provider works out of 1-2 locations employs 14-15 workers and generates $2.3 million annually.

    • The consumer products rental industry consists of about 8,400 firms that employ about 123,000 workers and generate about $19 billion annually.
    • Industry concentration varies according to product category. In the consumer electronics and appliance and video rental categories, the top 8 companies account for 87-89% of segment revenue. In the formal wear and home health equipment categories, the top 8 companies account for 50-59% of segment revenue. Other categories, such as recreational goods rentals, are fragmented.
    • Establishments that rent consumer electronics and appliances account for 35% of firms and 36% of industry revenue. Establishments that rent home health equipment account for 14% of firms and 20% of industry revenue.
    • The industry includes national chains, franchises, and independent operators.
    • Large companies include Aaron's, Rent-A-Center, and divisions of The Men's Wearhouse (tuxedo rentals).
                                Industry Forecast
                                Consumer Products Rental Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Mar 29, 2023 - Consumer Confidence Rises Slightly
                                • The Conference Board’s Consumer Confidence Index increased to 104.2 in March from 103.4 in February. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions— dropped to 151.1 from 153.0 in February. Based on consumers’ short-term outlook for income, business, and labor market conditions, the Expectations Index increased to 73.00 from 70.4. Ataman Ozyildirim, Senior Director of Economics at The Conference Board, said, “While consumers feel a bit more confident about what’s ahead, they are slightly less optimistic about the current landscape. The share of consumers saying jobs are ‘plentiful’ fell, while the share of those saying jobs are ‘not so plentiful’ rose. The latest results also reveal that their expectations of inflation over the next 12 months remains elevated—at 6.3 percent. Overall purchasing plans for appliances continued to soften while automobile purchases saw a slight increase.”
                                • US household debt rose to a record $16.9 trillion in the fourth quarter of 2022, up 2.4% from Q3 2022, according to a recent report released by the Federal Reserve Bank of New York. While the largest share of consumer debt stems from mortgages, the report showed ballooning credit card debts and rising delinquencies. Consumers’ credit card balances rose nearly 6.6% to $986 billion, marking the largest quarterly rise since the New York Fed began tracking the data in 1999. Credit card and auto loan delinquencies rose 0.6 and 0.4 percentage points, respectively. However, the total percentage of outstanding debt that’s in some stage of delinquency was 2.5% at the end of 2022, well below the 4.7% in December 2019.
                                • Consumers may be pulling back on spending amid high inflation and economic uncertainty. In a recent survey by PwC, 69% of consumers said they plan to cut back on nonessential spending over the next six months. About 15% of consumers said they plan to eliminate nonessential spending. About half of those surveyed said they were “extremely or very concerned” about their financial situation.
                                • Consumer product rental firms that serve the wedding market may see some improvement as weddings continue to bounce back after many events were put on hold during the pandemic. According to a recent Wedding Report survey of wedding industry firms, half said that their 2023 booking activity is either about the same or more than it normally is. About 19% said bookings were about the same, and 17% said activity was up 1% to 10%. Just over 10% said bookings were up 11% to 25%, and about 3% said booking activity had risen more than 25%. Nearly one-third of wedding industry firms said they had not seen couples cutting wedding guest counts, but nearly half had seen some trimming of headcounts. About 20% said they were not sure if guest counts were dropping. Wedding budgets do seem to be down; only 21% of firms said they had not seen any couples trimming their wedding budgets.
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