At 35,000 square feet, NewAvenues Rentals' Decatur, Georgia location is now believed to be the nation's single largest rental-purchase store.

From the September How 2 issue of RTO Magazine

Watch the video podcast with Mike Moore, President of NewAvenues Rentals.

What would make a guy with a successful chain of 300 specialty finance stores branch into the RTO industry? The answer is pretty simple.

"We noticed a lot of the customers coming in for our finance products were also rent-to-own customers. It looked like a good way to diversify our business," said Mike Moore, President of NewAvenues Rentals.

Moore said he was told a profitable RTO business consists of a 50/50 split between collections and deliveries. Since he figured his company already counted collections as a core competency, he set about finding a veteran RTO hire who could teach them the ropes for the rest.

Moore secured the assistance of a professional merchandiser and also hired rental veteran Bill Kelly. Moore credits Kelly in particular for helping NewAvenues ramp up from a single location in Jonesboro, Georgia to a total of eight Georgia stores within two years. But there is one store in particular getting attention from competitors.

"We found a former Circuit City location, in Decatur, Georgia. The site was perfect and we negotiated a great deal on the space," said Moore.

That space, consisting of about 35,000 square feet, is now believed to be the nation's single largest rental-purchase store. Moore says the store is growing according to plan, and that due to the relatively low cost per square foot, the plan is not as aggressive as one might assume.

Future Plans
Years spent targeting credit-constrained consumers for his financial business have given Moore a good context for creating a marketing plan to attract rental-purchase customers. How does he do it? In a word – television. And Moore is fortunate to have the services of both an in-house ad agency and an outside media consultant who work together to select the right mix of ad time.

"Yes, we like television. We do some direct marketing, but TV is by far our main medium. If you sat in one of our stores and polled 20 customers who come in, 18 will tell you it's because they saw us on television and the other two might say they are referrals. It's more weighted toward TV instead of word-of-mouth because we're still a start-up. But even after we've been open a few years, I still expect 50% of the customers will mention television as the main reason they came by."

Moore says location was the overriding factor in selecting the Decatur store, and has a definite mix in mind when searching for new real estate.

"When we're looking for a site for our financial stores, traffic count is mainly what we consider. High visibility is what we like. But for rental locations, we like high traffic and clusters of apartment buildings, and we also like to locate near a Wal-Mart, or an Advance Auto."

Moore is far from done expanding the NewAvenues concept. He has already selected three other cities in Georgia and he has also expanded his search to neighboring states including Florida, South Carolina, North Carolina and even Virginia.

NewAvenues' product mix leans toward furniture groupings, with furniture representing about 50% of all items currently on rent.

"Dining room furniture is the largest segment of our furniture rentals. For some reason, our dining room business is greater than most."

NewAvenues' marketing slogan says "It's all within reach!". With Mike Moore continuing to expand his concept throughout the Southeast, that certainly seems to be true.