What changes should Rent-A-Center make to Acceptance Now so it manages returned product in a way that enables 10%+ revenue and operating profit growth? Write a strategic/execution marketing plan using the provided ideas, elaborate and improve the information given with financial analysis support. Things to include and follow:
• Where will you allocate resources?
• What are your core competencies?
• Where can you differentiate your products and services for a sustainable competitive advantage?
• How exactly will you compete for markets, customers and profit?
• Create systems / processes / procedures to ensure that the plan is executed in an effective manner.
• Identify ways to monitor and track progress. What should we do if something appears to be going wrong?
• Marketing Mix: Products and services, Promotion, Pricing, Distribution
I. Sales Strategy (Only Furniture)
Utilize an online sales solution and leveraging B2B partnerships, to sell off existing furniture product to current and new customers. This will require the creation of a new brand (Decorpage Living). Inventory will be warehoused and distributed in partnership with a 3rd-party logistics company. Design the platform like moveloot.com, but the product will only come from Acceptance Now and not customers like Moveloot offers. Website needs to be simple and include collections like Move Loot such as bachelor pad furniture, rustic home furniture, modern furniture, etc. Categorizing: The furniture will be sorted on the website into multiple categories:
• Location: where customers can explore the furniture that is in the same region which will be cheaper to ship.
• Quality: As the refurbishing center receive the returned furniture, they will sort it into these three categories.
o Good as New. Which will be priced with 80% of retail price
o Refurbished. And this category will be priced with 60% of retail price
• Type: of course the furniture will also be put into clusters like; chairs, tables, sofas, etc…
• Collections: such as Move Loot to categorize styles.
Online sales would be the only sales channel and logistics will be outsourced to a 3rd party logistics provider. 3PL companies should handle receiving (pick and pack), storing furniture and delivering it to customers. Partnership with nationwide 3PL company can help better sell the inventory of AN all over the US. The online sale will go under a different name called “Decorpage Living” coming from the words “Decorate” and “Collage”. Selling under new name has multiple benefits (Include more):
• Targeting new demographics. Since Rent A Center and the whole rent to own business attracts specific demographic that when some other demographic would like to be separated from, the new name can spare any brand misjudgment.
• Get separated from the RAC negative image that some customers might have.
• Emphasizing on the new channel of business of selling and avoid mixing up or even stealing share from the rent to own main business. The online sales approach promises better financial compensation as well as less risk with lower capital investment by creating a website where the inventory of our furniture can be displayed.
Marketing Channels to promote Website: (List more Ideas)
• Creating an exclusive partnership with apartment industry leaders. In order to increase the sales and promote for our inventory. A partnership should be built with relative industry that can be a prospective channels for customers or even business customers themselves
II. Amazon (Only electronics inventory)
Electronics has lately proven to be a vital need for the consumers of all demographic and all types, the nature of technological advancement in electronics nowadays makes the continuous renewal a must, which leaves older versions as an unattractive item. One can tell how it is necessary to start selling and stop wasting book value of electronic inventory. Therefore, utilizing a giant online retailer “Amazon” is a good technique because sales through Amazon would propose a strategic solution by providing a reputable framework as well as providing the logistical base by the fulfillment coverage which Amazon provide for a considerable share fees. Amazon stores the electronics and handle all the pick, pack, ship and customers services for a standard monthly fee of $39.99 plus additional fees for fulfillment and referral that varies with each item, which has proven that Amazon fulfillment fee to be less than in-house fulfillment
Key Information:
• Merchandise mix challenges are being created in Rent-A-Center’s B&M store network as a result of Acceptance Now
• Customers in B&M view used product as less desirable than new product (Re-educate?)
• Returns from Acceptance Now are negatively impacting B&M gross margins
• Slowing growth because of used product volumes
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