NRF 15: Rent-a-Center puts down deposit on omni-channel e-commerce

The US 'rent-to-own' market is still a major sector, particularly for goods such as furniture and electronics, but for such companies, e-commerce isn't as straightforward as it is for other retailers.

They not only need to establish that they have the item that the customer wants, but also that the customer can afford to pay for it today, and in the future.

This is why one billion-dollar company is only just dipping its toes into e-commerce – a market that other providers in the retail sector have been playing in for 20 years.

Plano, Texas-based rent-to-own retailer Rent-a-Center accounts for 35% of the American rental market by store count, with 2,972 physical outlets in the US, Canada, Puerto Rico and Mexico.

How then is this historically bricks-and-mortar retailer coping with the shift towards new digital channels – particularly when some of its customers value their privacy more than most?

diginomica sat down with Ian Cohen, Rent-a-Center's VP of omni-channel, at retail technology conference NRF 15 in New York, to find out more.  Cohen argues that on the privacy question, things are changing:

For a long time, all retailers were very wary of how sophisticated you should be when it comes to personalisation. They thought that customers would feel uncomfortable if a retailer suddenly divulged that it knew a lot of information about them and was holding all this data about their transaction histories.

But that mindset is changing, particularly among millennials – the '25 to 35 crew'. Generally, they now expect that retailers will use their past buying behaviour to help personalise the customer experience for them across different channels in the future. And they're not only fine with it, but they now see it as a benefit.

If you take their shopping behaviour in stores and you use that to personalise their customer experience on the web, I've seen research conducted among 1,000 25-35 year-olds that says that over 90 per cent of them like it. And 70 per cent of 35-50 year-olds now think 'that's a good idea' too, which is higher than even I would have imagined. That's recent research that I've just seen presented at NRF.

So how many Rent-a-Center customers fall into that more youthful bracket of people who not only expect but also enjoy an omni-channel experience? While Cohen doesn't have precise numbers  to hand,  he says it is:

Quite a lot...Our customer base is a unique segment of the retail market. Our customers often have credit issues or are cash-constrained, and that's not an age demographic.

We have our own designations for customer types – for example, 'tech-enabled Tony', the working mom with kids, and so on – but our buyers span right across all demographics.

More and more have access to mobile devices. In fact, smartphones are a new product category for Rent-a-Center stores; they're one of our fastest-growing product lines.

Omni-thinking

Rent-a-Center has recently signed up to omnichannel e-commerce and product content management (PCM) solutions from Hybris – the Swiss company that was acquired by SAP in 2013. Cohen explains:

We're in the throes of development with Hybris to introduce e-commerce on our site for the very first time.

You can't currently buy a product on our website, because of the sensitive financial nature of some of our transactions – it's not like a woman just swipes her credit card and buys a handbag. Commerce has been much more difficult for us. But you can shop for products and fill out a form on our site, and that becomes a lead that's sent to a store, which then calls the customer to approve their ability to purchase. Then we put them on a rent-to-own agreement.

So introducing an e-commerce platform for the first time is going to have a huge impact, and it's an exciting one for us. There should be new customers and new types of customer.

I think it should positively influence our bricks-and-mortar stores as well, because we've learned quite a lot about how customers who get information online are much more likely to buy when they get to the store. We're going to continue to ramp up our omni-channel strategy.

So what's next down the line for Rent-a-Center? Cohen says:

We have a number of unique channels. If you look at an apparel retailer, they have web, they have mobile, they have social, they have stores – and maybe they have a contact center too. I could go to a number of traditional direct-to-consumer retailers and it would be the same story.

We have those too, to a certain extent. But although we don't have e-commerce – yet – we've developed an app that we're putting on 600 iPads in stores, where customers can pick a product and then deal with their application online in the store.

We've developed an electronic approval engine, where they can get approval for a certain amount of spending, and then complete the rent-to-own agreement and make the first payment, all on an iPad in the store.

And I share that because the engine we've developed is going to be hugely important for us. Now that I have that engine, I can take it online and we can do ecommerce and do approvals online. And that's going to happen in the next 12 months – probably sooner.

He adds:

We're also going to roll out 'unmanned' versions of our application, where we can have a Rent-a-Center kiosk in a partner store. So if a customer wants to buy a sofa, for example, and is not approved for purchase by the store, the retailer can then take them into our kiosk that's in their store, where they can fill out and maybe get approved for a rent-to-own agreement with us. Then we purchase the product from the retailer and give it to the customer, and have an agreement with the customer to rent-to-own.

So you can see that our channels are unique and – selfishly I would say – also pretty sophisticated.

More from NRF 15 : 

• NRF 15 : digital lessons for retail from sporting super-user teens
• NRF 15: A sporting chance at digital transformation

 

Disclosure: at time of writing, SAP is a premier partner of diginomica.