Best Buy looks to remain the leader in the consumer electronics category with its “try before you buy” rental service. The service, in partnership with Lumoid, gives consumers the option to check out big-ticket items like cameras, wearables and audio devices before fully committing to a purchase.
Best Buy’s foray into the rental market is an excellent extension to younger consumers considering new technologies and allows the retailer to differentiate itself in the consumer electronics category. Additionally, by offering items for a trial period, the retailer looks to prevent the habit of “shopping around”, where consumers compare prices in search of a deal.
According to our Retail Pulse study, Magid found that 14% of US consumers have rented a consumer electronics device in the past. This shopper skews young, male and is much more tech-savvy than the consumer electronics user.
The bulk (62%) of consumer electronics renters are under the age of 38. Comparatively, the largest segment (66%) of individuals that have never previously rented a consumer electronics device are over the age of 38.
Of those who have previously rented a device, 63% are male, whereas 37% are female.
Retail Pulse data also shows that 65% of consumer electronics renters have a connected home device (e.g., Amazon Echo, Google Home) versus 26% of non-renters. This group is more likely to purchase and embrace new technology sooner, as 65% of renters are planning to purchase a new device in the next three months compared to only 24% of non-renters.
Renters increasingly seek out the latest and greatest products, which has long been Best Buy’s core customer. 32% of consumer electronics renters are much more willing to pay for high-quality products, almost twice as much as those who have never previously rented a consumer electronics device.
This group also prefers distinguished, national brands (24% of renters vs. 6% of non-renters) and finds it easier to purchase products in store than online (23% vs. 18%), a notable shift from the e-commerce driven market of late.
Overall, 36% of regular Best Buy customers have rented consumer electronics devices in the past, at a rate more than double that of the general population.
If Best Buy can succeed in rolling out its rental program, the retailer has a valuable opportunity to foster even more loyalty among its core consumer base.