Home / Blog / Rent To Own 2024 Industry Recap

Monday January 27, 2025

Rent To Own 2024 Industry Recap

Rent To Own 2024 Industry Recap

At WOW Brands, we take a different approach: we believe macroeconomics and analyzing consumer behavior are precursors to effective marketing. It’s our job as a marketing agency to ensure you have the right media mix to succeed in tomorrow’s environment. When we review the Rent-to-Own (RTO) industry’s performance, we like to start wide and then narrow the focus. Please note that much of the Q4 data is still preliminary at the time of writing.

Retail Sector Overview

Overall, the retail industry experienced its 14th consecutive year of growth in 2024, albeit at a slower rate of around 2.5%–3.5%. However, within that broad retail landscape, the picture was more nuanced:

  • Home Furnishing Stores: Down an estimated 3.5%
  • E-commerce–Only Retailers: Up 8.9%

These mixed results highlight ongoing shifts in consumer buying patterns and underscore the need for RTO providers to adapt to evolving market conditions.

Key Developments in the RTO Industry

  1. IQVentures Acquired Aaron’s
    IQVentures took Aaron’s private. Known for solid operations, IQVentures is expected to leverage its expertise to refine Aaron’s strategy. Early indicators suggest potential moves toward expanded omnichannel and e-commerce initiatives.
  2. Buddy’s Parent Company, Franchise Group, Inc. (FRG), Filed for Bankruptcy
    This development creates uncertainty around Buddy’s operational future and could signal further consolidation or restructuring within the RTO segment.

Painting the Industry Picture: Major Players

We have several data points to help us understand trends in the RTO sector. Below is a snapshot comparing sales, year-over-year changes, e-commerce performance, and store counts for key industry players.

Company Total Sales YoY Change E-Commerce Sales Growth Store Count
Aaron’s $1,014M (6 months) –6.4% +20.8% –30 to –40
Upbound (RAC) $1,069M (9 months) +9.2% +26% –114
Flex Shopper $104M (9 months) +19.9% +19.9% N/A

Notable Earnings Callouts

  • Aaron’s
    • E-Commerce Growth: E-commerce recurring revenue increased 60.0% in Q4 2023 and 79.4% in Q2 2024, credited to a robust omnichannel customer acquisition program.
    • Lease Portfolio: Decreased 7.0% in 2023, then ended Q2 2024 down 2.0% YoY. However, same-store lease portfolio size ended Q2 up 1.6% YoY.
    • Acquisition: Acquired by IQVentures Holdings, LLC.
  • Upbound (Rent-A-Center & Acima)
    • Acima Segment: Revenues increased 18%, driven by higher rentals, fees, and merchandise sales.
    • Rent-A-Center Segment: Revenues up 1%, with a 1.6% increase in same-store sales.
    • Strategic Focus: Enhancing omni-channel experiences, leveraging data analytics, upgrading technology, and expanding product offerings.
    • E-Commerce Emphasis: “We believe e-commerce solutions are an important part of our lease-to-own offering.”
  • Flex Shopper
    • Lease Funding Approvals: Increased 53.1%.
    • Revenues: Up 20.3%.
    • Gross Profit: Grew 44.6%.
    • Profitability: For the nine months ended September 30, 2024, net income was $549k, compared to a net loss of $4.58m in the same period of 2023.

Doug Lindsay, CEO of Aaron’s, sums it up well:

“More and more customers, whether existing and new customers, have decided to come to us via the e-comm channel. That’s just the way the customer wants to interact.”

What’s Changing & What to Watch in 2025

  1. Consumer Buying Patterns Will Continue Evolving
    COVID-19 accelerated the shift to e-commerce, pulling forward nearly a decade’s worth of online shopping behavior in just a few months. Consumers expect seamless digital experiences—any RTO player lagging in e-commerce will face growing challenges.
  2. New Entrants Flooding the Space
    • Fintech tools have made alternative financing more accessible.
    • Acima has grown to 30k retail partners; FlexShopper, 7.5k.
    • Numerous smaller credit solution startups are also entering the market, increasing competition for traditional RTO operators.
  3. Buy Now, Pay Later (BNPL) Disruption
    • BNPL is growing at a staggering pace, with Affirm alone handling $26 billion in volume over the past 12 months.
    • This trend siphons off customers who might have traditionally ended up in RTO stores.
    • BNPL’s growth trajectory remains robust, meaning RTO firms must differentiate or risk losing market share.
  4. Inflation & Discretionary Income
    • Persistently high inflation has squeezed disposable income for many consumers, affecting their ability to afford larger purchases.
    • RTO typically thrives in economic environments where credit constraints drive consumers to alternative financing. However, if inflation remains elevated, consumers may cut back on discretionary spending, impacting sectors like furniture and electronics—core RTO categories.
    • On the flip side, if wages catch up with inflation, consumers could be more willing to engage in RTO or lease-to-own solutions to maintain or upgrade household items.
  5. ‘Peak Google’ and the Shift to AI
    • Google retains about 95% of search traffic, but AI-driven tools (ChatGPT, Apple’s upcoming intelligence platforms, Microsoft Copilot, and Google’s own AI solutions) are poised to change the way consumers gather information.
    • As AI begins delivering more direct answers, fewer customers will spend time sifting through multiple search results.
    • RTO companies must adapt to an environment where brand discovery may happen increasingly through conversational AI—rather than traditional web search.
    • This shift could happen gradually, but ignoring it will make catching up extremely difficult later.

Final Thoughts

The RTO industry in 2024 continues to evolve against a backdrop of shifting consumer expectations, emerging technologies, and economic pressures. E-commerce growth stands out as a major trend, underscoring how crucial it is for RTO players to invest in omnichannel solutions. Meanwhile, the rise of BNPL and fintech competitors has put pressure on traditional operators to innovate their product offerings, marketing strategies, and customer experiences.

Looking ahead to 2025, success in RTO will hinge on a few key capabilities:

  • Seamless Digital Integration: Meeting consumers where they are—online.
  • Flexible Financing Solutions: Competing with BNPL players and new fintech entrants.
  • Data-Driven Strategies: Leveraging analytics for better customer acquisition and retention.
  • Adaptation to AI-Driven Discovery: Preparing for a world where search patterns and user journeys are heavily influenced by AI recommendations.

At WOW Brands, we remain focused on helping RTO businesses navigate these shifts. By aligning macroeconomic insights with a strategic media mix, we aim to position our clients for both immediate growth and long-term success.