Will Lowe’s new push turn rentals into a tool for growth?

Discussion
Photo: Lowe's
Aug 21, 2020
George Anderson

Lowe’s announced earlier this week that it has its sights set on becoming a significant player in the tool rental market for professional construction trade customers and ambitious do-it-yourselfers working on home projects.

The chain’s tool rental departments will measure about 4,000-square-feet each and will be located in newly constructed space either in the form of an expansion of existing stores or built next to one. The first such location, which opened yesterday in Charlotte, NC, is part of a multi-year effort.

“For all of our customers, having the right tool is key to every project, but they may not always want to purchase a new tool or piece of equipment. Lowe’s Tool Rental helps customers save on the cost of owning, maintaining and storing the tools they need,” said Fred Stokes, senior vice president of pro sales and services for Lowe’s. “As the new home for pros, offering tool rental is just another way we are committed to keeping them working. Whether a pro’s tool fails on the job, needs a repair or they’re looking to try something new, tool rental will allow them to get back to the jobsite faster, saving them time and money.”

Lowe’s tool rental business will include new commercial-grade equipment for a wide variety of construction needs including concrete, drain cleaning, restoration and sanitation tools. Each department will be staffed with knowledgeable associates to serve customers.

Those looking to rent tools with a number of ways to order product including using an online reservation process and in-store kiosks. Digital documents for rentals can be viewed and signed using mobile devices.

The retailer’s push into tool rental puts it into an already big marketplace, estimated to be around $14 billion by the American Rental Association (ARA). Retailers in the home improvement space include Ace, Home Depot, Menards and True Value all currently offer rentals. Many other companies, large and small, specialize in renting equipment to the construction trade including everything from cement mixers to earth-moving backhoes.

John McClelland, ARA’s vice president of Government Affairs and chief economist, told Pipeline & Gas Journal earlier this year said the success of rental companies in the construction trade was due to those businesses becoming problem-solvers for their customers, helping them make more efficient business decisions and reducing the uncertainty that comes with making large capital investments in equipment. 

DISCUSSION QUESTIONS: Is Lowe’s making the right move with a concerted effort to establish itself as a viable source for tool rentals with both its professional trade customers and do-it-yourselfers working on home projects? Do you expect rentals both within Lowe’s business category and in others to continue to grow in the years ahead?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Lowe’s is late getting into the crowded tool rental market. Its success will depend on what differentiating value it can add for customers."
"I feel like Lowe’s is just copycatting Home Depot. It always did better with a focus on women, not pros. I like companies to stay in their lane."
"No brainer; what took so long? Value added services like this are what consumers are looking for and help reinforce the need for brick and mortar in retail."

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17 Comments on "Will Lowe’s new push turn rentals into a tool for growth?"


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Richard Hernandez
BrainTrust

Home Depot has been in the tool rental business for a long time, so its not a far reach for Lowe’s to get into the market as well. People are indeed upgrading and making improvements to their homes as they are staying at or close to home now due to the pandemic so if any time is a good time – it’s now.

Mark Ryski
BrainTrust

This seems like a reasonable if not logical move for Lowe’s. Making professional tools available for rent vs. buy will be compelling for many businesses/professionals and even do-it-yourselfers. But while there is little doubt that offering a tool rental service will be of interest to some of Lowe’s existing customers, the tool rental market already exists so I’m not sure how big an opportunity this is for Lowe’s.

Art Suriano
Guest

Renting tools is smart, and I’m surprised it’s taken Lowe’s this long to get into the game in a big way. The DIY customer is always tackling new projects, and having the right tool is essential. They’re not going to buy the tool if it’s a one-time job. For the contractor, having an opportunity to try out a tool before purchasing it by renting it also makes sense, I also see Lowe’s eventually coming up with a program where a percentage of the rental can be applied to purchases. That is usually a good incentive for all customers when they rent something. If done right and marketed correctly, I see this program as a win-win for Lowe’s and their customers and an excellent way for Lowe’s to increase profits.

Suresh Chaganti
BrainTrust

I wasn’t paying much attention, but I thought Lowe’s already did tool rental. It is a natural extension of what they do, with an existing customer base. From what I saw at Home Depot, the rent vs. own proposition doesn’t make a very compelling case. Anecdotally, I see rental costing as high as 20 percent of the price. I believe there could be a significant opportunity for Lowe’s to disrupt the status quo by making rentals more attractive.

Jeff Weidauer
BrainTrust

Lowe’s is late getting into the crowded tool rental market. Its success will depend on what differentiating value it can add for customers.

Gene Detroyer
BrainTrust

This makes sense. When we bought our first house some 50 years ago, my wife focused on filling the house with furniture and I focused on tools. How many of those tools did I hardly ever use? Yes back then every homeowner seemed to have the “necessary” tools that were hardly every used. (Today I have a hammer, pliers, and a handy screwdriver — that’s all.)

I wish I could have just rented those basic tools when I needed them. Plus, someone could have shown me how to use them properly.

Georganne Bender
BrainTrust

Lowe’s already rents tools so the commitment here is the sheer size of the new tool rental departments. That newly constructed space will be what separates Lowe’s from Home Depot, Ace, Menards, True Value, et al. Who knows if the number of tools available in Lowe’s new department will be any different from another retailer that stores tools for rent off the sales floor?

Tool rental is a service all hardware retailers need to offer to be competitive. There aren’t a lot of new hardware related categories to add – Home Depot is moving into home goods – so improving and expanding existing departments is one way to grow.

Gregory Osborne
BrainTrust

This is a logical extension of Lowe’s business as it develops closer parity with Home Depot and offers customers something they seemingly want. During the pandemic and for a least a little while thereafter, I’d bet this does really well — people have begun home-improvement projects at never-before-seen levels. I just hope Lowe’s doesn’t base its expectations for this initiative off of the unusual success it sees during the pandemic.

Paula Rosenblum
BrainTrust

I feel like Lowe’s is just copycatting Home Depot. It always did better with a focus on women, not pros. I like companies to stay in their lane.

Good luck to them, though.

Georganne Bender
BrainTrust

Remember the trend to market to women DIYers by selling pink tools? So stupid. Lowe’s already rents tools so I am guessing Home Depot isn’t too worried.

Steve Montgomery
BrainTrust

The tool rental field does not lack for competitors, however like each of those mentioned in the article Lowe’s has a built-in customer base of professional and DIY customers. This is a logical extension of the offer and should be well received. The added competition may also result in lower cost rentals.

Jeff Sward
BrainTrust

Rental is a portal for entry — entry into using a new tool and entry into a relationship between the retailer and customer. It’s great for the pro for seldom used tools. It’s great for the amateur who is early in the learning curve and may or may not want to buy. Overdue but totally makes sense.

Lee Peterson
BrainTrust

Well, Home Depot’s on its way to doing the same so don’t get the idea that this is going to be blue ocean for Lowe’s. In either case, it sure seems like a long overdue idea — do I really need to buy a buzzsaw or a tractor if I use them once or twice a year? But wait, come to think of it, the difference between men and boys is the price of their toys, right? Maybe this is a dangerous proposition! (jk)

Bindu Gupta
BrainTrust

Even though it’s a bit late to the game, Lowe’s is making the right move. The brand has to differentiate the value-add their rental service provides from others in the market.

Harley Feldman
BrainTrust

Lowe’s is absolutely making the right decision to enter the tool rental market. Customers who are looking to rent commercial grade tools can also buy their materials at Lowe’s – they are complementary interests to the DIY and professional trade customers. Tool rentals will grow in the future as tools become more productive to help the customer to get their job done. This will be true for Lowe’s and other tool rental companies.

Brent Biddulph
BrainTrust

No brainer; what took so long? Value added services like this are what consumers are looking for and help reinforce the need for brick and mortar in retail. No different than grocers carving space from center store commodity goods to provide prepared meals, meal kits and even sit down dining.

Regardless, good timing as WFH not likely to go away anytime soon. And Lowe’s still enjoys a slight edge over other HI brands when it comes to DIYers of both genders and all ages — that is where they should focus initially.

Carlos Arambula
BrainTrust

Tool rental is a big business, I can see Lowe’s carving a piece of it.

What I want to know is how the ancillary services and sales will be affected? What will be the positioning compared to Home Depot or the other business that cater to the professional/trade industry? What is Lowe’s positioning to the “ambitious” DIY customers? Will they co-promote tool rentals and, for example, lumber sales? Will they focus on repair or new projects?

On the surface the decision appears logical and organic to their operations and the space Lowe’s occupies in the consumer’s mind, but it is difficult to formulate expectations with the scant information provided.

wpDiscuz
Braintrust
"Lowe’s is late getting into the crowded tool rental market. Its success will depend on what differentiating value it can add for customers."
"I feel like Lowe’s is just copycatting Home Depot. It always did better with a focus on women, not pros. I like companies to stay in their lane."
"No brainer; what took so long? Value added services like this are what consumers are looking for and help reinforce the need for brick and mortar in retail."

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