This Space for Rent >BY JENNIFER LACH

American Demographics, August, 1999

The experience hasn't derailed the company's marketing push. Through direct mail marketer ADVO, it delivers flyers to 8.5 million households each month. Mailings are targeted according to ADVO's market profiles, but Benedict admits that it's difficult to measure effectiveness. "The flyers are meant to create brand awareness, not to blow the store doors down," he says. The company also buys regional spot TV in about 25 markets, mainly during daytime shows such as "Judge Judy." In all, it spends roughly $5.9 million a year on advertising and marketing.

Besides the rent-to-purchase chains, there's also a growing niche of businesses that focus on upper-crust customers who need furnishings for a short time and have no plans to purchase them. Exact figures are difficult to come by, but experts value the "rent-to-rent" market at about $700 million to $1 billion. Corporate clients are a big chunk of the business, as more and more companies relocate employees and help them resettle. In a recent survey of corporations by the Employee Relocation Council in Washington, 46 percent said they expected the number of transfers at their organization to increase this year.

Outsourcing has also boosted demand, says Jim Page, president of the International Furniture Rental Association. More companies are opting to house consultants who are working on short-term projects in furnished apartments rather than at hotels. "Our customers want the complete set, from the overstuffed leather sofa to the coffee pot," says Christa Landgraf, vice president of sales at Brook Furniture Rental, a rent-to-rent company in Chicago. At Brook, furnishings for a one-bedroom apartment cost from $250 to $400 a month.

Their annual household incomes may widely differ, but rent-to-rent and rental-purchase customers have one thing in common: They both want the best, no matter what the cost. Big-screen televisions lease for a steep $100 a month at Aaron's, and the company can't keep enough in stock. The high-end item accounts for 28 percent of the chain's business. "People always want to upgrade," says Bhatia at Southwest Securities. "If someone can afford a 20-inch TV, they want the 54-inch."

The rental industry hopes he's right.

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