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Strikes are not the only 1970s comeback. Take hire purchase (HP) payments. These are enshrined in the era’s culture as surely as the bulky TV that dominated British suburban living rooms. Financing, like electronics, has changed massively in the ensuing half century. But there’s a retro vibe to the current crop of offerings, like start-up Raylo’s “lease and reuse” subscription model.
Falling electronics prices did for the likes of Radio Rentals, a staple of high streets and HP purveyor of TVs and video recorders. In 1968 a typically tasteless console, half as wide as its modern iteration and multiple times deeper, cost £304 and 10 shillings — over £4,500 in today’s money. That would now buy at least four top of the range smart TVs or 40-odd smaller ones.
Same-day delivery was as much the stuff of dreams as the ability to watch more than three channels in shockingly low-res. Now, instant gratification is one of the key selling points of instalment payments. Thanks to Klarna and its shoals of Buy Now Pay Later peers you get outright ownership immediately in return for a partial payment. Subscriptions put everything from streaming to flowers on tap.
Raylo, a start-up valued at £100mn at its last funding round, is rewiring the HP story for the 2020s. It charges a subscription fee to give customers the latest gadgets — or, if they prefer, refurbished older models. That ticks the green box too, putting an iPhone in three sets of hands over its seven-year lifespan, rather than being consigned to the back of a drawer or landfill after one owner.
Like Radio Rentals, Raylo plays to the times. TVs in the 1970s regularly went on the blink, so the retailer’s band of 6,500 trained staff (more than a third of whom were “fully trained technicians”) and provision of a replacement TV during repairs was a big selling point.
Technology’s biggest failure now is its propensity to be rendered inferior by successive versions. Raylo’s subscription model addresses this by enabling customers to upgrade: either at the end of an annual plan, say, or sooner on a monthly rolling fee contract. (Tip for parents: this can also be used for games consoles, embedding the useful threat that it can go back at any time.)
Raylo even has securitisation of subscription cash flows in sight, as it scales up. That marries a model that captures the zeitgeist with a tried and tested financing. So long, of course, as it avoids the cliff hanger — culminating in a courtroom showdown — that accompanied the demise of Box Clever, Radio Rentals’ final iteration.
https://www.ft.com/content/382276ea-6ecc-4ab1-a2e4-5af97601d77b
