For the past ten years, cheap, reliable TV sets and unexciting
technological improvements, such as Dolby sound, meant six million TV
sets were sold annually and there was little reason to rent. Now the
happy coincidence of widescreen TV arriving at the same time as digital
has made rental a viable alternative.
As much as pounds 1000 apiece, high-tech TVs are prohibitively expensive
for most households and there is a natural hesitation to invest in
unfamiliar and fast-changing technology.
So the market is ripe both for Thorn, which owns the Radio Rentals,
Radio Rentals Express, Easiview and DER Direct brands, and for Granada
to pick their new customer niches in an attempt to expand the market and
encourage loyalty among their existing one million to 1.5 million
customer base which they each claim to carry.
According to Granada Home Technology’s marketing controller, Dudley
Moor-Radford, his pounds 3m TV ad campaign with Jeremy Clarkson, which
launches this week, is targeted at the new customer profile - ABC1 males
aged 25 to 45 - first singled out in its TV 2000 campaign.
That campaign and Granada’s World Cup push, which showed the advantages
widescreen would offer footie addicts, helped boost new business figures
by a staggering 76% in June. May, July and August also showed
year-on-year new business gains of between 17% and 35%, the first for
Granada in four years.
The task now, says Moor-Radford, is to continue that growth: ’It’s about
driving immediate sales rather than brand building.’
Nevertheless, Granada is adjusting its branding: its 460 remaining
stores (down from 550 two years ago) will go all beech flooring and
chrome in the next two weeks; Granada Digital will appear on all
corporate literature and logos (though shop signs will stay the same for
at least the next quarter); a helpline will be launched to give advice
on the new TV technologies, ’to support Granada Digital branding, not
for sales’; and the Digital Privilege Club, currently with 40,000
members, aims for a direct mail push that will take it to 100,000 by
ABs have never been as important as they are now to the expansion in the
TV rental market and Thorn, too, is going after them with a
For the first time, Radio Rentals is putting ads with what marketing and
merchandise director Mike Ryan calls, ’a different tone of voice’ in
glossies like Homes and Gardens and House Beautiful. It claims its own
pre-World Cup push on widescreen TVs netted it 20% of the market in
widescreen TVs and brought it a whole new customer base of AB males aged
25 to 35.
On the high street, Radio Rentals shops are reflecting the change with
13 of its 500 stores now rebranded Radio Rentals Express, and a total of
50 of the 500 coming under this umbrella by the end of the year. ’It’s
about shifting people’s perceptions of what the brand is all about,’
As part of that, Radio Rentals is going into third-party deals, the
first one with the Woolwich, rolling out in two months. Ryan won’t say
what it’s all about except: ’We’re having to be much more clever in the
way we target people, rather than taking a broad-brush approach.’
Although his pounds 10m marketing budget is much the same as last year,
it is being spent very differently. Direct mail and below-the-line
activity are being taken more seriously, so although 65% of DER Direct’s
allocation is going on TV ads, Radio Rentals has attacked its burgeoning
student customers with 240,000 branded beer mats, 400,000 postcards, one
million takeaway meal lids and posters in student union bars and
’We see rental having value either because of your economic situation or
particular circumstances in the short-term, like students. That’s very
much a point of difference with Granada - our shops offer a range of
merchandise, like white goods, which Granada doesn’t,’ says Ryan.
Thorn’s student business, across all categories, is up 20%
Its diversification into white goods four years ago is a measure of how
it once forecast the future of its TV and video rental business. Today,
however, Ryan is dismissive and claims the doldrums are over. ’Sky
Digital alone reckons it’ll have six million customers in four years.
It’s pretty aggressive and I feel comforted by that,’ says Ryan. ’That’s
going to have huge pay-offs for us.’
But John Binks, marketing director of GfK Marketing Services, is not
quite so confident. His survey statistics (see box) show the TV and
video rental market is remarkably stable. ’It could go either way as new
technology could certainly push people back to rental.’
That’s what the arrival of colour TV and even the advent of VCRs did 15
years ago, but it’s a long time since most rented before they
Rental brands are hoping digital will change that pattern.