Rent-to-Own

Rental in My Rearview Mirror: Reflections on 20 Years of APRO by Bud Holladay

Habitat for Humanity: The House that APRO Built by Kelli Montgomery

Rental-Purchase Bridges the Digital Divide by Ed Winn III.

 

 

 

 

Rental in my Rearview Mirror
Reflections along the road by Bud Holladay

So the Big A turns 20. Two decades of chills and thrills, right? Well, sort of. You see, too many folks in our line of work think everything started in 1980 at that first meeting in Dallas. But that’s like believing the neighbor’s kid was born at the age of 12 because that’s when we first started noticing him. In fact, the rental business was thriving in certain parts of the country as early as the 1960s. We just got serious about it in 1980.

Of course, if you’re a regular reader of this publication, you probably already know that. On the other hand, if you are one of the people who saw Elvis at Burger King last week or have solid evidence that JFK is alive and stored in a deep freeze somewhere in Utah, you probably have your own ideas about the origin of things, anyway. Somewhere in the APRO offices there must be a plaque reading, "In Business Since 1980. At least." We welcome all.

It’s hard for anyone who wasn’t around B.A. (Before APRO) to understand the profound effect that the organization has had on the way we make our living. Imagine a landscape with no legislation, no public financing, no national market, no dedicated vendors, no disclosure, no "right to rent." Just 1,200 owners with 800 ideas on how to define the business.

Sometime in the future, cave paintings will show that Ernie Talley started renting washers and dryers out in Wichita, KS, at Mr. T’s Rental at about the same time a guy named Slats (Norman Slatton) was doing the same thing down in Florida and calling himself Buddy Bi- Rite.

They didn’t know each other existed. It took about 20 years for the golden spike to be pounded in downtown Dallas and link the continent – or at least a fair number of its furniture salesmen and appliance manufacturers.

It should come as no surprise that it took the industry 15 or 20 years to get organized. This is, after all, the same group of folks who spent more than a few happy hours calculating just how long it would take before everybody in the surrounding zip codes had both a TV and a stereo. At which point, presumably, we’d cash in our tickets and occupy a spot on the front porch until the roll was called Up Yonder. Who’d have guessed Up Yonder would turn out to be Wall Street?

Maybe some of us are reluctant to acknowledge the industry’s existence B.A. because we are: a) ashamed of how easy it was to generate balloon-like margins in spite of ourselves; or, b) ashamed of balloon-like margins.

It’s a fact that distribution of big-ticket items to people on the underside of the economy – in an era when those folks didn’t show up in anybody else’s marketing plans – was both profitable and easy. It was understood that none of us would likely win the Leadership Award down at the Friday night Jaycees. In fact, some local chambers of commerce seriously debated our eligibility for membership.

It wasn’t uncommon in those B.A. days to be snubbed by the guys who sold product to local retailers. Some salesmen wouldn’t solicit our business for fear of alienating their "good" customers. The guys who did sell to us had a better handle on the scope of our industry than we did. We tooled along in ignorant bliss, each happy to be the first to think of this deal.

Some of us found unique niches, like renting ladies’ wigs by the week (don’t laugh – we moved a lot of wigs, and not just in a strong wind, either). But anyone who wanted to rent furniture had to get around the objections of the biggest lender to the industry, who declared that no rental furniture could possibly last long enough to get our cost back. Today they’re out and room groups are in. Go figure.

Advertising generally consisted of a $300 schedule on local radio, which produced more deliveries than most guys could handle. Paid-outs and charge-offs were all but unheard of due to airtight collections.

Previous customers coming back later routinely started over. In fact, the phrases "rent to own" or "rental-purchase" weren’t part of the vernacular until about 1980 or 1982. Up until then, it was simply "the rental business."

Since the industry was largely concentrated in big cities, the customer base was prima rily Appalachian or African-American, mostly poor and absolutely without access to any kind of financing for big-ticket purchases, not even layaway. Some dealers dispute that characterization and swear their average customer looked more like June Cleaver on credit hold. Truth is, the New South might have been born by then, but it wouldn’t be old enough to vote for a few more years.

The rental business had always had low barrier to entry. By 1980, the slicks had moved in. Their résumés were spotted with failed car lots and shaky loan companies and highcommission boiler rooms. That the boys with plaid coats and shiny hair could so quickly establish a toehold with shabby goods and outrageous collection tactics was worrisome to the rest of us. But it wasn’t the loss of customers we feared: it was being put out of business by some state court enraged at the latest humiliation inflicted on some grandma unlucky enough to miss a payment. So the farmers called a new sheriff to town: APRO. Longtime vendors helped put together a mailing list and other people added names of friends or a company some sales rep had said was doing a lot of business two towns over. It must have been the rental industry’s most successful mailer because 50 or 60 rental dealers showed up at a hotel in Dallas in 1980 when there was no golf tournament, no banquet and you had to buy your own drinks.

An idea became a body when all those in attendance put up money and voted to organize for change and improvement. Almost everybody there knew somebody who’d been hauled into court to talk about usury laws or forced to give away truckloads of televisions to kids in raggedy tennis shoes because we collected too many late charges from one or more of their relatives.

After a few false starts – nobody could decide whether we should be a lobbying group or an industry watchdog – APRO began changing the way people who write and enforce laws viewed our industry. And those changes were startling: full disclosure contracts, expanded customer rights, civilized collections, and – despite flack from mossbacks who believed good government was less government, unless it was handing out tax breaks – regulatory oversight over just about every aspect of the business. Even down to the size of type in the contract.

The mossbacks thought APRO had stopped mending and started meddling. Some stomped out, taking their checkbooks with them. We didn’t need regulation, they yelled, we just need the bad guys the heck out. We came to realize later that their idea of "bad guys" included anybody who might want to get into the business, especially in their ADI. APRO directors and supporters argued that airlines had been subjected to the closest scrutiny for years and they seemed to get along fine. Somebody would always point out that, while airplanes and their pilots might need watching over for obvious reasons, nobody ever heard of a rental store crashing and killing 85 people. When rental stores crashed, they said, the only things that died were the careers of a few vice presidents and store managers (if you’ve ever worked for either one, you know that might not be a crime or even a tragedy).

Dealers cleaned up their acts and the doors gradually opened to a national market "safe across all borders." Naturally, a few smart and hardworking fellows, realizing that the average dealer no longer had to fear being set afire and run out of town, thereupon reached the conclusion that this business was made for Wall Street: niche market, good cash flows, sizzle.

Then they learned that Wall Street likes real profits, the kind measured in dollars, not represented in horsepower and acreage. Just as quickly as it had rolled off the press, one prospectus after another was rolled up and became a table leg wedge in somebody’s apartment. You might think this is where the phrase "on the level" originated, but there is no evidence to back that up.

By the early 1980s, Chuck Sims’ Houston-based Remco operated stores that were generally admired for setting new standards. Why, they actually had clean plate glass, new carpet and professional displays of brand new goods available that very day! The people who worked in those stores looked more like the folks next door than the guy in the competitor’s basement dialing up your Aunt Louise and threatening her dog for another payment. The business had arrived.

Sims, who had started his career as Ernie Talley’s point man at Mr. T’s, had figured out what others hadn’t: hire smarter people, put them in attractive surroundings and they will, in turn, attract and keep customers who act like buyers and not renters. Sims knew it was cheaper to keep customers than replace them. If you have ever tried to figure out a formula for keep rate, forget the math and follow Sims’ lead. It still works. What seems ordinary today in store layout and merchandising was radical and ahead of its time in 1980.

(Side note: Without the dynamic leadership and unwavering support of Chuck Sims and others like him, there’s no guarantee that APRO would be here today. Some people write checks, others lead. Sims did both. You should be thankful. You should also be glad that he’s not still in business and competing against you. )

When Remco’s premature IPO was shelved for lack of interest, hardly anybody noticed. Except, that is, for a gregarious young man named Thomas R. Devlin. Devlin had also been trained in the Ernie Talley school (see a trend here?). Rent hard. Collect fast. Spend little. It worked.

Devlin attracted investors willing to develop expensive markets with multiple S&S Rental Center stores so long as Devlin would buy them all back later, after the stores had depleted all available tax breaks but still had plenty of BOR left. He snickered behind the potted plant and agreed to their outrageous demands. And that is how a former Mr. T’s manager trainee in Baton Rouge, LA, came to own the world’s largest rent-to-own operation.

Devlin’s ability to recruit investors and managers when everybody else was trying to recruit customers and collectors eventually resulted in a successful initial public offering that opened the floodgates. Suddenly there was a river of public money for an industry starved for financing.

About a year after Devlin’s IPO, one foolish young owner in Dallas turned down Devlin’s bid to buy his company on the spot for a little cash and a lot of stock at eight times revenue. Eight is less than the 12 thrown around these days, but when sales are $1 million a month in 1980s dollars, debt is one turn and you’re looking at eight on the offer sheet, it’s all relative. That young owner’s name is at the top of this article; Devlin’s name is on a lot of luxury car dealerships and real estate deeds and at least one business chair at his alma mater.

When S&S Rental Center became Rent-A-Center and finally a Thorn in the side of anybody forced to compete against its mega-stores and their drilled and driven managers, the industry took notice. We looked around at shabby showrooms, dull people and even duller marketing and decided that we had either get into the game or hit the showers. After a little polishing up, some companies were out of business – sold to the Rent-A-Centers – while others were opening new stores and buying the small competitors that had seemingly sprung up in every market. Lenders came out of the woodwork when Wall Street bought into this rent-to-own thing.

None of that would have been possible, or at least very likely, without the safety net strung by APRO. If you ever wonder what all those dues have bought you, consider this: today you have the choice of either a well-funded retirement via a sale to a public company or a safe environment for all the rent-to-own you’ll ever want to do. Not a bad choice and you get to do the picking.

What APRO couldn’t forestall was the eventual collapse of scores of operations whose owners had been able to borrow more than they could manage.

Dizzying growth had been achieved not by internal cash flows and good management, but by acquiring entire chains using revolving credit lines from a friendly trio of commercial lenders. Eventually, the cash flows couldn’t support the sky-high interest charges and bloated overheads. Companies built on credit line instead of business plan failed. The situation eerily paralleled the implosion of the nation’s savings and loan industry of the same period. Except in our business, nobody went to jail. Hardly anybody passed Go, though.

By 1988, Transamerica Rental Finance Corp. found itself operating more than 400 repossessed rental stores nationwide and not much liking it. In what was truly a magic moment, the guys holding the debt quickly put up new signs, standardized operations and called it a company. Then they set out to find buyers for their company. Along the way, they got out of the business of loaning money to rental dealers.

The result was a shockwave. Dealers whose loans weren’t in default desperately searched for buyers on the (often accurate) assumption that they soon would be. Inventories shrank, credit lines evaporated and companies slowly went out of business waiting for buyers to show up.

It was a wake-up call for an industry theretofore awash in borrowed money and big dreams. Companies were forced to sell out or strengthen their balance sheets, stabilize their operations and work with their local banker to develop a sensible credit facility. In a testament to the market, the end result was more stores in more markets than ever before.

Without the orgy of easy money that marked the period 1980-85, it’s doubtful that the number of public companies devoted to rental-purchase today would be more than one. Out of chaos comes opportunity for the prepared and the well-heeled. And so we find ourselves entering our third decade in a business declared dead more times than Regis Philbin’s career. And now everybody can be a millionaire. Well, almost. I’ve always been suspicious of people who wear buttons that shout out, in so many words, "Hey! I’m An Honest Guy – Honestly!" However, I’ve never been afraid of losing my wallet or my ideals when some new guy introduces himself, sticks out his hand and asks, "So how much money do you think one of these stores ought to make?"

Bud Holladay is a former president of APRO and founder of the Association. He is currently chief operating officer of RTO Inc., based in Norfolk, VA.

 

The House that APRO Built
By Kelli Montgomery

It took about eight days, 2,000 nails, six buckets of paint, 1,056 bottles of water, 970 pounds of ice, an assortment of building materials and a birthday cake to make someone’s dream come true. Rosa Sanchez, a laundry-room attendant for the past 15 years at Tarlton Textile Services, has earned the reputation as a hard-working, dependable person, raising a famil y and main tainin g a job. Despi te her effort s, thou gh, she and her famil y have been force d to rent dilapi dated hous es in impo veris hed neigh borh oods, at times without such basic necessities as safety locks, working lights or even running water. Rampant crime and drug abuse in previous neighborhoods have made raising a family in a safe environment increasingly difficult.

That’s all about to change, however, thanks in part to the ongoing community relations program between the Association of Progressive Rental Organizations and Habitat for Humanity.

In July, Sanchez, her two children and two grandchildren, will unlock the doors to their brand new four-bedroom home located at 605 Delmar in Austin, TX. For the first time, Sanchez and her family members will have their own bedrooms, along with reliable plumbing and electricity, a big yard and the pride of home ownership. In many ways, thehouse is not only the manifestation of a dream by the Sanchez family, but also by the volunteers and members of the industry who were able to turn a good idea on paper into a tangible, three-dimensional structure in central Austin.

The rental-purchase industry is proud to call the Sanchez family home, "the house that APRO built."

"Hopefully we can make the life of someone else a little better," says Rent-One dealer Larry Carrico of Illinois, who brought a team of six workers to Austin for several days to help with the build. "There seems to be a lot of pride with someone owning their own house and APRO was kind enough to donate all the money. We’ve got a lot of volunteers and that’s what it’s all about – people working together for a common cause," he says.

The house is the result of a ‘blitz’ build, an eight-day expedited build in June involving the family, APRO dealers, volunteers, the Casa VerdŽ kids and the Habitat for Humanity crew working 10 to 14 hours per day to complete the project. Sanchez and family members donated 400 hours of their own "sweat equity" toward their home and other Habitat houses in order to qualify for the program. Sanchez is also required to pay a zero-percent interest loan that helps fund other Habitat houses.

The purpose of Habitat for Humanity is to eliminate poverty housing by providing decent, affordable houses within each community.

APRO Executive Director Bill Keese, who worked at the site each day of the build, says the Habitat project provides a team building process by which rental dealers and employees are able to give back to people who are less fortunate.

"We have rental dealers from across the country volunteering their time and their money to come to Austin to work on this build," says Keese.

"The APRO Habitat home is a culmination of many years of trying to pull this industry together, not only for legislative reasons, but also to reach out in the communities where we do business and give back to these communities in a meaningful way," says Keese. In 1998, for example, rental dealers donated 100 refrigerators and stoves to the Jimmy Carter/Habitat for Humanity Build in Houston and participated in the First Ladies Build nationwide. This year, APRO decided to take its participation one step further by donating $55,000 to fully fund the Sanchez house and supplying Habitat for Humanity with about 20 to 30 rental dealers and employees to work each day of the week during the "blitz" build.

While it’s almost impossible to explain the feelings of accomplishment of the individual participants of this project, it’s interesting to find a general consensus among the cast of volunteers who ran the gamut in age, skill level and purpose for being there. Strangely enough, the participants, who sustained unrelenting, exhausting hours in 95-degree Texas heat and who couldn’t even remember what day it was most of the time, said they’d do it again in a heartbeat.

"I’m tired and I’m worn out, but I am glad to be here and I’ll do it again," says rent-to-own consultant Lindsey Semon, who could always be spotted on the site donning his characteristic shark-fin cap. Among other things, Semon headed the electrical work at the site, set up the tents each day and made sure all the volunteers stayed hydrated throughout the build. "It’s hard work but it’s a lot of fun. You make a lot of friends and learn some new skills," he says.

Full-of-Pep Appliance District Manager Mike Goodin of Indiana, a die-hard music fan, thought he might actually get to experience some Austin music during his trip, but instead ended up working at the Habitat site the entire time. Nonetheless, he says he felt totally fulfilled at the end of each day.

"It’s an experience I’ve never had in my life. I didn’t know what to expect, but I learned a lot, doing things I never thought I could possibly do," he says. "It sounds like a lot of hard work, but once you get in there and start working with volunteers and crew members of Habitat, it’s not as bad as it seems. As it progresses, you see your work could actually become a house and you feel quite good about yourself."

Despite what appeared to be seemingly endless days at time, volunteers for this project worked as a team, doing whatever needed to be done without complaining about the tasks they’d been assigned, the mistakes they had to correct or the injuries they had sustained. Everyone worked the 12-hour days with surprisingly high spirits despite fatigue, soreness and heat exhaustion.

Easy Way workers John Herlong and Rodney Smitherman, who turned 17 at the build, patiently hung the exterior doors four times before the task was complete. David P. David of Full-of-Pep – the chief indoor painter and plumbing assistant at the site – came to the build each day with an ice pack on his back, but still managed a full 12-hour shift every day. Shannon Strunk and 10 employees from Baber’s Leasing in Mississippi and Louisiana, drove 800 miles to participate in two days of the project before returning home to work the rest of the week at their regular jobs. Kathy Romine of Show Me Rent-To-Own caringly puttied, painted and then applied a second coat of paint to the exterior walls and battens until the job was done right, while husband, Gary, who injured his arm on day three lifting drywall, put in more hours and completed more tasks than imaginable during the eight-day build.

"This group seems to have a higher need and desire to be here," says Sam Garner, Austin’s Habitat for Humanity site leader, who worked at the site on his day off simply because he enjoyed working with the APRO crew so much. "It’s the best group I’ve ever worked with. I had a blast working with you guys."

Shawn Hohnstreiter, Habitat staff project manager, reiterated that point, saying that the exceptional attitude and experience of the crew members eased the hectic building schedule. "The APRO build has gone great. We had a lot of experience. The crews made the week enjoyable for how many hours we put in. There was great leadership and experience from within that made my job really easy," he says. Hohnstreiter and several volunteers who worked the full eight days contributed close to 100 hours of labor during the week.

In the end, people were tired, sore and ready to leave the Texas heat, but they shared an experience that will mean something to them and the Sanchez family for the rest of their lives. For whatever personal reasons, they built a house from the ground up in eight days for a family in need. "It’s been a good, hard, long week. It’s been a lot of fun watching this thing go from start to finish," says Romine, who along with wife Kathy, received the "MVP" award for their tireless and valuable efforts throughout the build. Romine, who has participated in several projects such as this one, says this experience offers a better appreciation of his industry.

"If a person goes their whole life without giving back to someone else, they don’t fully enjoy their life," says Romine. "And this has been a great opportunity as a group to come in and do a major project. I’m sure a lot of people have had small contributions they’ve made, but when you put on an effort like this to build a full house, you’ve made a tremendous impact."

Romine says he hopes APRO and the industry will continue with similarprojects in the future. "Don’t let the chain of love end with this project. Continue on. Until you help someone else, you can’t fully appreciate the help you’ve been given in your own past," says Romine.

The Sanchez family should be moving into their new Austin home in late July or early August.

Kelli Montgomery is a freelance writer living in Austin, TX.

 

Rental-Purchase Bridges the Digital Divide.
By Ed Winn III

Rental dealers should not expect to be given a lot of credit, now or later, but in their own quiet way they are already contributing to the solution of a relatively new, persistent social/economic problem that is being identified as the "digital divide."

The president talked about the seriousness of the problem in his last State of the Union address. There was a Digital Divide Summit Conference held this past December. There are several Web pages devoted exclusively to the problem – e.g., www.digitaldivide.org and www.digitaldividenetwork.org. The government is throwing millions of dollars at the problem. There are commissions and studies and generally a lot of palaver and handwringing about it in the country and abroad and, in the meantime, rental dealers have seen a need and have already started filling it.

Who’s On, Who’s Not

In a nutshell, with the advent of the Information Age, there are the "haves" with multiple computer stations and Internet appliances around the house, at work and at school with the knowledge and ability to use these tools in everyday life. Then there are the "have nots," with none of the above. This disparity has become the "digital divide." Indeed, few would argue that personal computers and Internet access are increasingly important for economic success and personal achievement in the United States in the 21st century.

Since 1995, the National Telecommunications and Information Administration has issued three studies documenting the extent of this divide. The latest study offers detailed findings on U.S. consumers’ access to telephones, computers and the Internet. The study finds increased computer usage and Internet access generally in the country, but the divide is widening.

At the end of 1998, 40 percent of U.S. households had computer access and 24 percent had Internet access. The "have nots" variously include rural households, low income households, minority households, households with lower education and single parent households.

For example, 60 percent of households with incomes of $75,000 or more per year have Internet access versus 12 percent of households making $10,000 or less. By race, 38 percent of Caucasian households, 36 percent of Asian households, 19 percent of African America households, and 17 percent of Hispanic households were on the Internet at the end of 1998. Urban households with incomes of $75,000 or mo re are 20 times more likely to be on the Internet than rural households at the lowest income levels. Copies of the studies are available at www.NTIA.org.

Building the Bridge

The government is not merely identifying the problem. Tax dollars are being spent to solve it. The Department of Education has a Community Technology Centers Initiative to make computers and Internet access more available in inner city neighborhoods. The Department of Housing and Urban Affairs has a Neighborhood Networks program with a similar goal. Expect other federal and state agencies to develop programs to speak to the issue. Whatever the government does to help, it will be the private sector that builds the best bridges across the divide. The rental-purchase industry is poised to play the role of major bridge builder.

Rental dealers already have as a customer base some of the digital "have nots." These customers are already renting furniture, appliances and electronics, which are the necessities of modern 21st century life. This life is suddenly demanding a new necessity – Internet access. If it is not yet quite a necessity for all Americans, it soon will be.

For Americans struggling to make ends meet already, here is yet another cost of living in the land of opportunity – a computer or Internet appliance, perhaps a first telephone line or even a second and an arrangement with an Internet service provider or some third party for Internet access. Most dealers will recognize that a high percentage of their customers and their customer base are not yet "wired." The two main reasons given for being a "have not" in the NTIA study were cost and "don’t want it." The first reason may not go away, but soon Internet access in homes will be as ubiquitous as TVs and telephones.

The Tech Challenge

Adding computers and Internet service to rental store inventories has not been easy. There is often a digital divide inside the rental store between the dealer who sees an opportunity and store personnel who are charged with explaining, renting and servicing computers and Internet products. Store employees who once prided themselves on being able to set the clock on VCRs for customers are in a brave new world of information that requires new knowledge and new skills. Computers do not leap off the tables into customer’s arms. Many customers may genuinely feel that they do not need to be on the Internet. Most rental customers, after all, have already had whatever it is that they are currently renting – an old TV or sofa replaced with a quality rental unit. Not so with computers and Internet service. And if they do not understand how and why being on the Web is going to make life better in some way, they are not going to rent it, and even if they do, it will not stick if it is not used.

Service is an issue with computers and Internet access. The service component has kept many dealers away from offering computers, that and the rapid technological advances and the obsolescence that ensues. Rental dealers have been afraid of amassing stockpiles of outdated computers that won’t rent and that no one wants. The marketplace is solving those problems for dealers.

New suppliers, Xanatron and others, are tailoring programs for the rental industry and its customers to make it hassle-free to add computers to rental inventories. Computers are increasingly simple and reliable. The speed of processors continues apace, but today a computer of a certain size, say with a 350 mhz processor and 32 mb of RAM, will work satisfactorily with a 56k modem. While not state of the art, such a configuration should be serviceable for a year or two. Long enough, in any case, to make it a suitable product in many rental stores, especially for customers getting their first machine and hooking up to the Internet for the first time.

Rental employees will need more training in this Information Age. They will increasingly need to be computer literate and Internet savvy. Rental companies will have to spend money on human resources to provide that training or lose their employees to someone who will.

A Golden Opportunity

It is and will be a continuing challenge for rental dealers to learn the full value of Internet access to daily life and then teach that value first to their employees and then to their customers. Rental dealers have at least talked about having classes in their stores to school customers on how to use a computer and surf the Web effectively. Groups of dealers could sponsor such efforts with local schools, probably with some government grants, donate a few machines and rent a whole lot more.

The opportunity is there since the "have nots" have been identified and many of them are already coming into rental stores every week. Rental dealers know how to do business effectively with their customers and do not necessarily require a checking account or credit card to do so.

Part, though by no means all, of the Internet access issue has been credit. Most Internet service providers want a credit card and the ability to bill against the card automatically each month. Some of the "have nots" have no credit, some have bad credit and some are credit constrained. All rental dealers have had customers who fit into one or more of these categories and have figured out how to maintain and serve this customer base. It typically has required a higher level of service than traditional retail and rental dealers have provided it successfully. Now there is this vast new "need" in the marketplace. As e-commerce expands and consumers find new uses for their Internet connections besides reading their e-mail, this need will increase. Rental dealers are poised to meet much of this need, especially among the current "have nots" who find themselves in that category for cost or credit reasons.

The process has already begun. While there may be smaller dealers who have built their own digital bridges without a lot of fanfare, the public companies are seriously pursuing computers and Internet access for their customers and are doing so behind serious marketing efforts.

Rainbow Rentals reports that nearly 20 percent of its revenues and BOR are now in computers. The company currently offers a traditional rental-purchase program for a stateof- the-art computer with Internet access made part of the deal. RentWay has announced a new rent-to-rent program for a computer system and Internet connection, all for $19.95 a week. Rent-A-Center recently announced an Internet service available to anyone through their stores for $5.95 a week.  

Access Speed and Other Hurdles

The challenge is a lo ng-term one. Already there are technological issues. One needs a machine of a certain size and speed with a certain amount of RAM to troll the Internet waters effectively. Most consumers are still hooked up to the Internet with telephone modems with a maximum speed is 56k. But the Internet elite has access two to 20 times faster with cable modems, DSL lines and still newer technologies. If the challenge is to get everyone online who wants to be online, regardless of financial circumstances, the next challenge will be to get everyone online at close to the same speed.

The pace of change is so fast that there will be other challenges to arise long before these initial hurdles have been overcome. How, for example, will consumers without credit do business online when they get there? RentWay is offering a debit card to its computer customers. The 7-11 chain has announced an Internet card that customers can buy with cash values that can be spent on the Internet. While the issues are many, so are the solutions created by innovators in the marketplace.

It is indeed a new world in the making, this Information Age. Rental dealers have a rare opportunity to offer brand new goods and services to their customers and to bring brand new customers through the doors to take advantage of their unique way of doing business.

The Information Age has quickened the pace of commerce for everyone. This stepped-up pace is likely to continue into the foreseeable future. Rental dealers are in a perfect place to take advantage of an opportunity that this new age has created. They can grow BOR and profits and, at the same time, engage in a socially responsible endeavor, in some ways, like never before.

The prospects are at once thrilling and frightening. But then all change is that way. Big change all the more so. Society will not allow a large percentage of the populace to lose out on the benefits of the information revolution because, for the first time, the economics do not require that to happen. The pie is getting a lot bigger. Rental dealers will play a big part in the bridge building to come. Dealers with courage and wisdom will move the industry far ahead of where it has been and will play a vital role in erasing the digital divide.