DISCUSSION
Best Buy's gadget rental relationship didn't get off the ground
Written by RetailWire Staff
Photo: Lumoid
In areas of retail like high-end apparel, the option to rent instead of buy is becoming increasingly popular. But whether renting will work in the gadget space remains up in the air now that erstwhile Best Buy rental partner Lumoid has closed its doors.
Lumoid, a startup which only six months ago inked a deal with Best Buy to offer electronics rentals, including professional cameras and fitness trackers, has gone out of business according to the Minneapolis/St. Paul Business Journal. Lumoid planned to allow customers to rent Best Buy's gear. Customers deciding to buy products after the rental period were to receive a discount.
Lumoid appears to have been operating with some success prior to the Best Buy deal, according to statements made by CEO Aarthy Ramamurthy to TechCrunch. Mr. Ramamurthy referenced Lumoid having shipped "hundreds of thousands of Lumoid gear." Lumoid's inability to raise enough funds to fulfil the relationship with Best Buy appears to have played a role in ending the company.
Given that it was internal financial issues that led to Lumoid's collapse, the third-party platform's failure doesn't necessarily rule out the possibility of rental working for consumer electronics, and such rentals aren't entirely unprecedented.
For instance, it wasn't uncommon during the video game console boom in the late-'80s to find stores that would rent out consoles alongside games themselves. However, a search of gaming-related forums indicates the model to be almost unheard of today.
And the way we use gadgets could make some of them unlikely candidates for rental. For instance, it may not make sense to rent a new smartphone, given that much of the value we get out such devices comes only after loading our personal information, perhaps complicating the arrangement when the item needs to be returned.
For fitness trackers might be a better bet for the rental model, but such devices aren't selling like they once were, with FitBit sales down 22 percent last quarter according to Wired.