Rent-A-Center CEO Blames Tech for Massive Sales Drop

Since late last year Rent-A-Center has been feeling the ramifications of a disastrous POS rollout that has been sapping the chain of efficiencies and adversely affecting the bottom line. In fact, in a preliminary reporting of the chain's Q3 financials CEO Robert Davis reported that the fallout from the POS rollout is still being felt, contributing to a 12% sales drop in the quarter.  

“Following the implementation of our new point-of-sale system, we experienced system performance issues and outages that resulted in a larger than expected negative impact on core sales,” Davis said in a company statement announcing the preliminary Q3 results. “While we expect it to take several quarters to fully recover from the impact to the core portfolio, system performance has improved dramatically and we have started to see early indicators of collections improvement.”

The retailer's POS struggles can be classified as a classic "too much, too soon" scenario.  As it is with all retailers Rent-A-Center's POS is the heartbeat of the enterprise, with countless systems tied to and dependent upon, the point of sale's functionality. Rather than slowly rolling out the new system the retailer decided to accelerate the deployment across the chain in an attempt to lessen and shorten the disruption — unfortunately it had the opposite effect.  

"Despite our team's efforts to mitigate the negative impact of accelerating the implementation of the new system, the decline in core top line results was more significant than we expected, making up over half of the second quarter decline in core same-store sales," Davis said back in July when the retailer reported its Q2 results. "Although the system performance and usability issues identified in the first quarter were fixed, the distraction of the new system impacted our core portfolio and took time away from collections efforts, which resulted in a hit to revenue. Given the impact to the portfolio, we expect it to be a few quarters before we fully recover.

The operational and financial fallout stems from system performance and usability issues which significantly cut into employees' effectiveness and ability to perform their tasks quickly and efficiently. While it is tough to categorize the POS deployment as anything be a failure, once all the bugs are worked out and financials put back in order the retailer will have a feature-rich solution with next-gen capabilities.

Among the features of the new POS solution is a unified commerce approach to transactions with cohesive data collection, storage and analysis both in-store and online. In addition, the new system will allow Rent-A-Center to customize pricing by region and product category to reflect segmented customer demand.