Verizon IP network to boost Rent-A-Center

Computerworld - Rent-A-Center Inc. recently replaced about 700 different networking service contracts with a single three-year agreement to service its 3,000 rent-to-own stores in North America.

The agreement, reached by the Plano, Texas-based retailer and Verizon Business earlier this year is valued at $34 million for three years, Bob Rapp, Rent-A-Center chief technology officer, said Friday.

Verizon Business, a unit of Verizon Communications Inc., provides Rent-A-Center with a private IP network running under MPLS (Multiprotocol Label Switching), giving nearly all of the 3,049 stores secure connections at 384Kbit/sec., Rapp said. That connection allows the stores to send back sales and other data to Plano or regional locations, but also allows for security that meets the Payment Card Industry (PCI) Data Security Standard for transmitting sensitive financial information on rental agreements.

In the future, each network connection can be expanded because of the flexibility of MPLS to allow in-store streaming video training for employees, Rapp said. The store's in-store kiosks used by customers and point-of-sale functions work well within the current framework, however, he said. In-store training with video is less expensive than sending trainers to stores, but more effective than using written communications. As with other retailers, employee training is a constant need, with annual turnover of retail workers ranging as high as 60%, he said.

Rapp said it would have cost less for network connectivity to have stayed with various DSL and cable connections to the thousands of stores, but MPLS assures that security can be applied uniformly without the need for added software in each store. "Also, we had 700 different networking services vendors before, which was a cost itself and difficult to administer," Rapp added. "And having higher-quality bandwidth was important."

Rapp picked Verizon after comparing its offer and price to other service providers, and found that Verizon had the most extensive network for reaching all but a handful of Rent-A-Center stores, which tend to be located in rural or urban areas not always reached by carriers. For those stores not reached by Verizon, Rapp will rely on wireless connections or DLS.

Rent-A-Center typically operates stores in areas where the household income is on the low end, ranging from $15,000 to $75,000 a year. Even so, Rapp said the retailer's research showed that 30% to 40% of those homes have Web access, meaning Rent-A-Center is expecting to use its new network to support Web-based payments for leasing furniture, consumer electronics and other appliances.

"Five to seven years ago, there wouldn't have been as many PCs in the homes of our customers, but we've found that now there's a vast preponderance of Web access," he said.