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

                                Nov 4, 2022 - Gen Z Consumers Prefer BNPL over Credit Cards
                                • A growing number of consumers prefer so-called buy-now-pay-later (BNPL) services over credit cards, according to the recent Buy Now, Pay Later Tracker survey by payment technology market research firm PYMNTS. Nearly 60% of consumers prefer BNPL services – also called “point of sale installment loans” – over credit cards, and the preference is even more pronounced among Generation Z consumers. Industry watchers say BNPL offers some handy advantages but can also pose risks. Point-of-sale installment loans typically have a faster approval process, payments can be easier to manage than credit cards, and purchases are usually interest-free if paid off on time. However, missed payments are subject to late fees, and some BNPL firms don’t account for a borrower’s ability to repay before issuing a loan. Consumer product rental firms will likely face increased competition from BNPL services, especially for big-ticket items such as appliances, furniture, and electronics.
                                • Despite inflation-related drops in consumer demand and payment activity, lease-to-own and home goods retailer The Aaron’s Company posted strong revenue growth in the third quarter of 2022. Aaron’s revenue increased 31.2% in Q3 over the same period a year earlier, reaching $593.4 million. While inflation dampened lease revenue and retail sales, e-commerce was a bright spot, growing 11% year over year. The company also gained efficiencies through continued investments in centralized lease decisioning.
                                • Emergency aid from the federal government helped cut the US poverty rate to 7.8% in 2021 from 9.2% in 2020, according to the Supplemental Poverty Measure report released by the US Census Bureau in September. The percentage of children living in poverty fell 4.5 percentage points to a record low of 5.2%. The official poverty rate, which doesn’t consider the effects of government assistance programs, was 11.6% in 2021. However, an Urban Institute survey and the Census Bureau’s Household Pulse Survey suggest food insecurity has increased as government air programs, including refundable tax credits and stimulus checks, have expired.
                                • A majority of Americans, 53%, are optimistic about their financial future even amid inflationary pressures and concerns about a possible recession, according to TransUnion’s Q3 2022 Consumer Pulse Survey. However, increased financial strains have dampened consumers’ outlook. In Q2 2022, 55% of consumers were optimistic about their finances, and that was a drop from Q1 when 59% were optimistic. Nearly two-thirds of those surveyed (60%) believed the US is either currently in a recession or will enter a recession before the end of 2022. About 64% of consumers plan to reduce spending to prepare for a recession.
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