How Rent-A-Center Cuts Costs on the Cutting Edge

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Peter Tsanacas implements a fresh redesign for Rent-A-Center, enhancing the customer experience while reducing environmental impact and utility costs

BY J D W H IGHAM (HTTP: / /AMERICANBUILDERSQUATERLY.COM)

Peter Tsanacas recently found himself in the midst of implementing the next big thing for Rent-A-Center stores. Having been with the company for six years, three factors immediately came to mind: branding, customer image, and customer experience. “We need to stay relevant in the rent-to-own space,” Tsanacas says.

When it comes to leading the rent-to-own market in North America, Rent-A-Center immediately comes to mind. After all, the company has roughly 2,400 locations operating across all 50 states, Canada, Mexico, Puerto Rico, and operates brands such as Get It Now!, Home Choice, and AcceptanceNow. As the senior director of construction, Tsanacas and his team are tasked with determining how those locations present themselves.

But store appearance isn’t the main focus for Tsanacas. He’s also working to reduce the stores’ environmental impact and cut costs in the process. To curtail the magnitude of updating every location and keeping them consistent, Tsanacas and his team work in waves, applying changes to each location as its lease renewal comes up. “As we go to renew a lease, we like to put some kind of capital improvement in the store,” Tsanacas explains. “We’re trying to really bring a new image every five years in our cycle.”

That pattern of updating and redoing a store from scratch would take up much needed time and resources. To cut down on those instances, Tsanacas determines how he can work with what is currently in place. “We’re not making major, drastic changes that increase cost a lot,” he says, “but we’re giving a new experience to the customers.” Tsanacas and his team began testing the redesign last year, which will include about 400 locations by the end of 2017. Large-scale implementation will begin in 2018 and, by the end of 2021, the new layout will be reflected across all Rent-A-Center stores.

This update furnishes each of the locations with larger, more customer-focused fixtures to showcase merchandise with greater effect. As Tsanacas explains, the new display fixtures “allow customers to touch, feel, and play with what it is that we’re renting.”

In addition, the refreshed design organizes each store into more clearly delineated departments by using borders marked by varying flooring materials. Electronics and appliances, for example, are separated through unique displays that hold related items, which makes stores all the more navigable for customers. Section distinctions also improve customer flow within the stores, benefiting both customers and employees. As a customer, it’s easier to navigate the store and compare similar items. As a salesperson on the floor, it’s easier to introduce customers to related products and engage in suggestive sales.

Another measure that Tsanacas is implementing throughout Rent-A-Center locations is a switch from fluorescent lighting to LED. To ensure this was the right move, the team ran a small test in two stores in the Dallas market with a “plug and play” system of low-voltage LED lighting. Results from the tests were positive, so they expanded the system to 50 and then to 100 stores. “Now, that is the lighting of choice going forward,” Tsanacas says. “The new LED system creates great return on the investment, very minimal fail points, and potential to expand the technology in the future if we want to include occupancy sensors, customer counters, or something else. Those opportunities are endless when you’re working with DC low-voltage plug and play.”

Even with the positive test results, applying LEDs universally wouldn’t guarantee benefits for the organization. As a result, Tsanacas targeted areas with the best rebates available, plus ones where the company was paying the greatest amount per kilowatt-hour. Hawaii, for example, offers no rebate, but the power costs were high enough that “the payback from saving on the kilowatt-hour was greater than any rebate checks we’ve been receiving,” Tsanacas says.

“We’ve seen a utility savings of about 30–35 percent in stores where we’ve implemented this,” he says.

Rent-A-Center has also seen advantages in repair and maintenance. No longer having to service bulbs and ballasts every year, the company can put that money and time into other needs. The LED system has only one fail point—the transformers in the back—but Tsanacas and his team have a plan to replace poor transformers overnight. “For the past three-and-a-half years that we’ve had these systems, we’ve had no failures,” he says.

Another area in which Tsanacas is moving in a more sustainable direction is choice of flooring materials. Most of the area in Rent-A-Center stores is covered with carpeting, which needs replacing every five years. Until recently, the company used a broadloom rolled carpet. That meant pulling up entire sections any time the carpets were repaired. To make repairs more efficient, Tsanacas now utilizes carpet tile, which allows workers to pull up and exclusively replace heavily trafficked areas or even individual tiles. This causes a massive reduction in waste created during maintenance because much of the floor is covered by furniture in Rent-A-Center stores, and thus accrues little wear. “We’re replacing probably 85 percent less carpet than we were previously,” Tsanacas says. “It’s great for the environment, and it’s great for us.”

Keeping that substantial portfolio of stores up to date is certainly no easy task. But with these systems in place—a renovation cycle based on leases, testing new measures, and implementing these measures only where they would be most effective—Tsanacas has ensured that the portfolio isn’t overwhelming. Rather, it’s just a more effective way to provide better customer service.

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