Could web rental efficiency gut DIY chains?

If specialized do-it-yourself tools can be rented, easily and efficiently, for two hours, will that start to hurt Lowe's and Home Depot?

home depot interior
REUTERS/Jonathan Ernst

Of the many startups that materialize on the U.S. business landscape every year, most enter an existing space, with very few offering a product/service that no one has yet seen. When entering an established market, most have a differentiator, such as a way to price lower or a patent that allows them to ship much faster.

But when Elias Chavando launched his startup, Rentus.com, last year, his sole major differentiator was simply technology. He knew that there are many businesses in the rental business, but they're overwhelmingly antiquated, with many still using paper and pencil to track inventory and revenue. Even worse (or, from Chavando's perspective, better), these rental stores have a hyper-local mentality, selling only to a handful of nearby neighborhoods. The rental business is a vertical that the web forgot.

The rental idea is simple. Consumers can take items that they own but don't use very frequently — a snowblower, a high-end power tool that might be needed for one project a year, etc. — and can get a cut of rental revenue from them.

Chavando owns both the Rentus.com and Rntus.com domains and is transitioning everything to Rentus.com, but he said that he wants to do it slowly for SEO purposes.

But there's another layer to Chavando's strategy. Instead of competing with and trying to replace the thousands of rental shops that already exist in the U.S., he is partnering with some of them, with Rentus providing the web platform and the national support and the shops providing inventory. Some of these rental shops, Chavando said, are now uploading their inventory for the first time because — wait for it — they don't have any computers.

In the last year, he said, the site has offered about 75,000 items and has been processing about 100 rentals a day. Those numbers can get complicated because it's a combination of a single purchase from a consumer to many rentals for a business (an average of 289 rentals per company, Chavando said). Things have been accelerating since 2017 began, with the CEO reporting 75,000 transactions from Jan. 3-24, at an average price of $17/transaction.

Chavando argues that rental activity "will have a significant impact on retail." It may not be such a wacky thought. The disjointed offline-only nature of existing rental shops hasn't posed any serious threats to the likes of Home Depot, Lowe's or Target.

But if the web is good at nothing else, it is good at finding business inefficiencies and resolving them. Consider Uber and Airbnb. How many of us have purchased an unusual tool — for repairs, cooking or car maintenance — that we would likely only use rarely? Wouldn't renting that tool for two hours fully serve our needs?

If RentUs ends up working, will this hurt sales of these tools from traditional retailers? Or could it work in the reverse way? Will people start purchasing these tools with the sole intent of renting them out?

Chavando also argues that business areas where renting is widely done can also be enhanced with web-fueled lower prices, citing products such as event porta-potties, motorized wheelchairs and hospital beds for home use.

Whether or not this startup succeeds, it raises a discomforting thought. If any efficiency or transparency improvement hurts major retail chains, that probably says more about the inherent weaknesses and flaws within retail chains than anything else.

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