When Payless Cashways decided to compete for the light contractor dollar, the Missouri-based home-improvement and building-supply chain surveyed its customers to see what services they wanted. The answer came back loud and clear — tool and equipment rental.
The reasons are obvious to those already in the rental business. Why should do-it-yourselfers or light contractors spend hundreds or even thousands of dollars for a tool or machine they will use once when they could rent it for a fraction of the price? If they already are spending hundreds or even thousands of dollars on materials for a job, they probably can't spend additional hundreds or thousands on tools. Rental is the perfect option.
Those customers also want the availability of rental because of the busy nature of today's world. If customers are buying tools and supplies in one store, why should they drive somewhere else to rent equipment? Why not take care of it all in one place?
Several years ago, when Home Depot began preparing its rental program, rental center owners were concerned about the loss of the market for smaller tools and equipment. They were worried about competing with a company that buys in massive quantities and, therefore, can undercut them dramatically on rates.
Some rental companies developed servicing and referral relationships with Home Depot or other building-supply or home-improvement retail chains. Others determined that they weren't really threatened and continued doing business the way they did before. Others, however, experienced customer-base erosion and abandoned that small contractor/homeowner segment almost completely.
Hardware co-ops such as Ace and TruServ have become players in the rental market. Building chains such as Lowe's and Scotty's have partnered with rental companies to have them run rental departments.
The jury is still out on a lot of these retail-type programs. It's certainly still out on the programs we examine in this month's cover story — Payless Cashways' relationship with Ahern Rentals, and the partnerships of Canadian companies Revy, Building Box and Cashway with Stephenson's Rent-All. Ahern is off to a pretty good start after only a few months. A few years into its program, Stephenson's appears well-established. But it takes more than a couple of months or years to determine long-term success.
Some people think these partnerships are brilliant. Others are convinced they are a waste of time, that the rental companies cannot possibly make money by pursuing them.
The history of the rental industry tells of numerous retailers such as Sears that failed in efforts to marry retail with rental. But retailers still are attracted to rental and still are trying new approaches to make it work.
In this issue, RER begins a series to look at these efforts, some of which appear more sophisticated and well-thought-out than past ventures. We hope you come along for the ride and let us know what you think.
The reasons are obvious to those already in the rental business. Why should do-it-yourselfers or light contractors spend hundreds or even thousands of dollars for a tool or machine they will use once when they could rent it for a fraction of the price? If they already are spending hundreds or even thousands of dollars for materials, they probably can't spend additional hundreds or thousands on tools. Rental is the perfect option.
Those customers also want the availability of rental because of the busy nature of today's world. If customers are buying tools and supplies in one store, why should they drive somewhere else to rent equipment? Why not take care of it all in one place?
Several years ago, when Home Depot began preparing its rental program, rental center owners were concerned about the loss of the market for smaller tools and equipment. They were worried about competing with a company that buys in massive quantities and, therefore, can undercut them dramatically on rates.
Some rental companies developed servicing and referral relationships with Home Depot or other building-supply or home-improvement retail chains. Others determined that they weren't really threatened and continued doing business the way they did before. Others, however, experienced customer-base erosion and abandoned that small contractor/homeowner segment almost completely.
Hardware co-ops such as Ace and TruServ have become players in the rental market. Building chains such as Lowe's and Scotties have partnered with rental companies to have them run rental departments.
The jury is still out on a lot of these retail-type programs. It's certainly still out on the programs we examine in this month's cover story — Payless Cashways' relationship with Ahern Rentals, and the partnerships of Canadian companies Revy, Building Box and Cashway with Stephenson's Rent-All. Ahern is off to a pretty good start after only a few months. A few years into its program, Stephenson's appears well-established. But it takes more than a couple of months or years to determine long-term success.
Some people think these partnerships are brilliant. Others are convinced they are a waste of time, that the rental companies cannot possibly make money by pursuing them.
The history of the rental industry tells of numerous retailers such as Sears that failed in efforts to marry retail with rental. But retailers still are attracted to rental and still are trying new approaches to make it work.
In this issue, RER begins a series to look at these efforts, some of which appear more sophisticated and well-thought-out than past ventures. We hope you come along for the ride and let us know what you think.
