Digitalization set to transform Equipment Rental Industry

ERA report on Impact of Digitalization on rental

TRT Staff, 24 June 2022

Digitalization is future in the equipment rental industry and it is set to transform it. A report was presented and discussed at the ERA (European Rental Association) Convention 2022 that concluded in Riga few days ago. The report was prepared by analysing case studies within and outside the European Rental industry. It also took studied different reasons that led to digitalization for a rental company, considering specificities of small, medium and large companies.

The findings of the report indicated clearly that digitalization would impact the equipment rental sector and the future rental market will be different from what it looks now.  Digitalization will affect the equipment rental sector will in the following ways:

1. Efficiency: It will improve process efficiency through digital tools – this can include internal business processes of a rental company, as well as improving the customer journey

2. Value: It will deliver value from data, which constitutes additional value proposition for customers. The challenge is to find the ways in which employees and customers can transform data into business value

3. Transform: It will transform (create new) organizational and business models.

The report also discussed the reasons for digitalization.  It said, customers need is the foremost reason for digitalization as the findings established the shift of customers from traditional model to digital model.

The report also said, digitalization enhanced operational efficiency and effectiveness due to which there was a faster interface with customer – ordering, billing, payment, on and off rent. There was a data provision to customer – Rental fleet / spend / utilization.  

Maintenance and repairs had become planned from reactive. There was an automated maintenance request/machine replacement. Asset replacement was now based on history of fleet.  

Logistics was now faster and customers could track it on their own. Asset Management became easy. Purchasing of new equipment was now based on demand forecasting and location utilization.

The digitalization was also found beneficial to equipment rental companies as it also increased commercial efficiency and effectiveness of rental company. The findings pointed out increased margins, reduction in revenue leakage, effective sales management and added value services and solutions.

The future rental market will develop like the electric scooter market, plant at user locations, rent, use, off rent and manage the asset completely digitally, the report said.

The report also listed the major benefits of digitalization:

1.     Turnround time – Increased by 50%

2.     Credit decrease – Credits posted to customer decreased by 40%

3.     Increase in billable services – Revenue increased by 45%

4.     Reduction in time to process service / maintenance – Reduction of 32%

Lastly, the report also highlighted, digitalization and data will become a requirement for a rental company. 

(The Presentation can be viewed on European Rental Association (ERA) website)