APRO Focus Groups Findings May 20 th, 2015

Transcription

1 APRO Focus Groups Findings May 20 th, 2015

2 BACKGROUND Conducted primary research for APRO to determine perceptions & openness of consumers to the concept of Rent-to-Own for two groups: Hispanics and Millennials.

3 Focus Groups Conducted Two Types of Focus Groups Conducted 2 Video Focus Groups: Hispanics and Millennials 10 In-Person Focus Groups: 5 Hispanic and 5 Millennials, in 5 markets: Tampa Atlanta Columbus St. Louis Dallas

4 Acculturation for Participants in Hispanic Focus Groups Columbus Acculturated Dallas Unacculturated St. Louis Acculturated Atlanta Biculturals Tampa Unacculturated

5 We Explored 8 Key Areas 1. Shopping behaviors 2. Financing preferences 3. Unaided impressions of Rent-to-Own After obtaining unaided responses, moderator provided a Rent-to-Own definition and explained key characteristics. 4. Aided impressions & receptivity to Rent-to-Own 5. Receptivity to: 90 days same as cash Early Purchase Option Payment Reinstatement Rights Free Delivery and Repairs

6 We Explored 8 Key Areas 6. Comparison table 7. Ways RTO retailers could effectively reach these 2 targets 8. Media usage habits

7 Key Findings

8 The Bad News: Negative Perceptions of RTO

9 Recurring Negative Perceptions Of RTO It s extremely expensive The total price of the items considerably exceeds retail and can be the equivalent of several times a competitive purchase price Merchandise is used Merchandise is of lower quality Merchandise is not brand name Items available will be dated or not in current fashion RTO stores are not as nice RTO associates are not as professional as retail store associates RTO will negatively affect your credit if you don t complete an agreement Only people with bad credit or in financial trouble use RTO Only people in temporary situations use RTO Such as a short term job in a different city

10 The Challenge with Millennials Millennials are VERY image conscious Negative perceptions of RTO are particularly damaging with this group Even if they find the overall concept appealing, they are reluctant to be associated with this type of purchase

11 That s Why Education is Key To successfully reach new targets and entice them to consider RTO as a purchasing option, it is imperative that the industry counter these perceptions Millennial Participants recommended Rebranding

12 Rebranding/Changing Perceptions

13 Consider using: Ready to Own

14 Not Everyone is an RTO Potential Customer: We Must Target the Right People

15 Target The Right People The majority of participants, when asked about their impressions of RTO, voiced many negative expectations. However..after presented with: Definition of RTO Purchasing options such as 90 days same as cash Early Purchase Option Payment Reinstatement Rights Free Delivery and Repairs Comparison Table Video & Chat Focus Groups Receptivity to the concept didn t increase In Person Focus Groups Receptivity to the concept considerably increased

16 What Made The Difference? Original Criteria Top Income Level: $70,000 Did not consider credit standing Did not consider customer s financial habits Adjusted Criteria Top Income Level: $60,000 Cannot have excellent credit (self-reported) Must have a preference for paying in installments. Note: Please note that focus groups are qualitative and as result they are not an ideal place to measure demographic characteristics of a group, such as those of the RTO ideal target. These findings are directional; in order to confirm them, it s recommended that quantitative research is performed (in the form of a survey).

17 A Strong Online Presence is Key

18 A Strong Online Presence is Important Most consumers start their purchase cycle by researching products online Millennials are more likely to start their purchase cycle online Acculturated Hispanics also use the internet to gather information

19 Shopping Online

20 Online Behavior They start with a search engine, such as Google They visit retailer websites They will go to sites for reviews Even those who start searching at stores go back home and research products they like before purchase

21 Organic vs. Paid Search Results Consumers can differentiate between organic and paid search results They mostly ignore the paid results Search Engine Optimization (SEO) is key based on this finding

22 Organic vs. Paid Google Search

23 What is SEO? Search Engine Optimization The process of maximizing the number of visitors to a particular website by ensuring that the site appears high on the list of results returned by a search engine

24 The Store Experience is Still a Big Factor

25 The Store Experience is Still a Big Factor Even those who do most of their research online are likely to purchase higher value household goods at a store Unacculturated Hispanics are more likely to start and finish their purchases in a store (without ever going online)

26 Store Experience

27 Ideal Sales Associate Behavior Participants indicated that: They would like to be greeted at the door and have the associate offer any help as needed They prefer that the associate doesn t hover over them during their interactions with the products they are considering purchasing. They would like to get help when they have any questions Hispanics were more open to having more interaction with the sales person For unacculturated Hispanics, having someone who understands the language and respects their culture is key Millennials are more likely to want to be left alone

28 Ideal Sales Associate Behavior

29 The Good News: The Right People Become Open to RTO with the Right Information

30 Education about RTO is Essential Many participants in the in-person focus groups responded positively to the RTO concept once they were exposed to the following: A comprehensive definition of RTO Comparison message table (against credit, retail & Craigslist) RTO options such as 90 days same as cash and payment reinstatement options

31 Education

32 Positive Response to Definition of RTO Key points: It is a rental first No legal debt Return the product without any penalty Credit is never extended Most products are new and brand name products Choose how to pay (weekly, bi-weekly or monthly) Typical RTO agreements are for one year, 18 months or two years

33 Extremely Positive Response to the Comparison Table Many of the participants, particularly unacculturated Hispanics, had a positive reaction to this comparison table:

34 Reaction to Comparison Chart

35 Same as Cash Options Very positive reception to 90 days same as cash Receptivity increased when a 180 days same as cash option was brought up

36 Payment Reinstatement Rights A Good Incentive to Try RTO Many found the option of pausing an agreement extremely useful. However, many were concerned about the fact that this would mean that they would be without the item they are renting for a period of time. But that means I would need to be without my washer and dryer for a month!

37 Brand Names, New and In Stock A Big Plus! (and a Surprise) Expected only used items available Expected only non-brand name items

38 Hispanics Especially Open to the RTO Concept Once educated, Hispanics are extremely open to the RTO concept Particularly unacculturated Hispanics

39 Unacculturated Hispanics Reaction to Comparison Chart

40 Unacculturated Hispanic Consumers Customer Service Needs They stated that having Spanish-speaking sales associates at the store is important to them They want someone who understands & respects their culture

41 Recommendations Things to Know Things to Do

42 A Good Internet Presence Is a Necessity RTO retailers need to maintain an effective online presence Company website Invest in SEO

43 SEO Tip: Utilize Shoprto.com to Improve Results Linking with expert information websites such as ShopRTO.com can increase your site s organic standings More info in the Deep Dive presentation Get with APRO for more info

44 Education Is Key in Marketing Materials for Both Hispanics and Millennials Helpful Hot Buttons: Credit is not extended / no legal debt Products available are new Products available are name brands There s no penalty for retuning a product Communicate clearly the benefits of the RTO agreement, utilizing some form of the comparison table The words Ready to Own don t carry the stigma of RTO

45 Target Unacculturated Hispanics This target is a sweet spot for RTO They were extremely enthusiastic about RTO once educated about how RTO works

46 Maintain A Modern Store Look for Millennials Store look and location is extremely important to Millennials They are very image conscious

47 Apply APRO s Ideal Store Recommendations

48