09-07-02
RTO Online
What does the future hold for Rent to Own PC's?
One of the reasons Rent to Own is so successful, is that it offers sub-prime
consumers access to merchandise unavailable to them in their current
circumstance, with no debt.
History proves that, as a products retail price falls, demand for that
product by RTO consumers falls as well. 10 years ago, VCR's were a big item.
Today, when a consumer can buy a VCR at K-mart for $39, they are an add-on at
best. DVD players are headed in the same direction. A struggling economy has
forced retail PC prices down to historic lows. On Friday, Wal Mart introduced a
$199 computer.
The $199 unit is stripped down, and is in no danger of replacing the quality
HP, Compaq, Dell, and Gateway machines being rented today. But at 1/3 the cost
of other companies introductory models, it could impact the market
significantly.
The PC is manufactured by Microtel, a Sweden based manufacturer. Specs:
800MHz, C3 processor from Via Technologies (Taiwan), 128MB SDRAM, 10GB hard
drive, CD-ROM, and integrated Ethernet connection. Modem and Floppy drive can be
added at a charge. To further cut costs, the unit does not use the Windows
operating system. The PC is shipped with LindowsOS, a low cost Linux based OS.
Windows and other upgrades are available. The PC is currently available only on
Wal Marts website. The retail giant has not announced plans to stock the PC
in stores.
Can we compete?
Yes, but not at the low-end. Fortunately, Rent to Own is not about price. It's
about wanting the best, wanting it today, with no debt or long term commitment.
Rent to Own must focus on the latest technology and a world class level of
service during the rental. As with televisions, there will always be a need for
19", but the profit is made with 32", 36", and up. Rent to Own consumers want,
and deserve, the best. If you buy the best, and charge for it, you will survive.
Fight with Wal Mart, Best-Buy, or Circuit City for price and payment, and you
will perish.
end
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