The heavy equipment rental industry is booming. The global construction equipment rental market is expected to see a 4.5% growth over the next few years and should be worth over $155 billion USD by 2026. As technology changes shopping habits in every other industry, the question emerges of how the ecommerce boom seen in 2020 will impact heavy equipment rentals and the construction industry.
What Is Causing A Boom in Equipment Rentals?
There are a few reasons that construction equipment rentals have become more popular for companies versus buying. These include having the right machines for the job, increased efficiencies, improved safety, rising labour costs and the general cost of buying and maintaining equipment.
Companies seeing the monetary value in renting specialized equipment over buying it. As equipment becomes more and more technological the price to buy and maintain go up. If equipment is sitting for even a few weeks unused, it’s money out the window. Renting equipment when it’s needed decreases the need to pay such high upfront costs. Plus the costs spent on equipment yards, storage, maintenance and other costs related to equipment can be reduced or eliminated. Renting in the long run can be much more budget friendly than buying.
Safety and efficiency is another big part of why renting is becoming more popular. Renting specialized equipment for shorter periods of time to complete specific jobs increases overall project efficiency. It is also much safer to use the right machine instead of making a general piece of equipment. For example, renting a skid steer and mini ex can make a job much safer and efficient than trying to use a larger backhoe to do both jobs in half the capacity.
Rising costs of labour plays a role in increasing equipment demand. Not only is labour becoming more expensive but finding people in the construction industry is more difficult now than ever. Labour shortages have been a topic in the industry for many years. In a very general sense, equipment can do the work of many people. Making projects more efficient with the proper equipment can help reduce general labour needs by keeping the project moving without requiring more bodies.
Buying Habits & The Rental Industry
Ecommerce and shopping online has grown 4X faster because of COVID than previously predicted. Unfortunately, businesses large and small no longer have the luxury of taking their time in learning about ecommerce and using the next few years to get their business online. Customer expectations are shifting and shoppers in all industries now look for an online buying – or renting – process.
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Ecommerce in Construction
Construction is often looked at as a very manual and physical industry. What could shopping online possibly have to do with the construction industry? Looking at the changes in the equipment rental market over the past few years alone shows just how much of an impact ecommerce will actually have.
Ecommerce isn’t new for the construction industry as a whole. Stocking on PPE and general handheld tools or even ordering materials from nails to lumber have been done online in the past. The slow transition has been expedited with COVID.
As ecommerce becomes more normal for businesses, the efficiency associated with online rentals and purchases will become more recognized. Soon, renting equipment online will be the preferred method for construction companies large and small as they can track rentals, manage payments and deliveries all online from anywhere.
Efficiency and Ecommerce in Construction
A bit pro when it comes to ecommerce ordering, renting and purchasing for companies is efficiency.
Imagine being able to go to your preferred supplier’s website, viewing available equipment, putting in rental dates and booking the rental all online within minutes.
Imagine being able to offer that experience to all customers.
Ordering online takes minutes, involves little to no back-and-forth telephone or email-tag and leaves behind any number of time-stamped documents for future reference.
As the construction company becomes more dependent on the equipment rental industry, it will be vital that the equipment rental industry can keep up with the level of demand. The old telephone-chasing method will not be setting rental companies or their renters up for success.
In this way, the construction equipment rental industry is perhaps more ready for ecommerce than any other industry out there.
The Digital and Ecommerce Future of Construction Equipment Rentals
There are two things that are for certain:
1. Studies have shown that consumer shopping and B2C (business-to-consumer) habits do bleed into B2B (business-to-business) shopping habits
2. Ecommerce will be a differentiating factor for customers when deciding what brand or company to buy – or rent – from in the coming years
These two things mean changes for both rental companies and contractors renting equipment. Now is the time for rental companies to set up ecommerce solutions for their website. Now is also the time for those renting equipment to start looking for ecommerce solutions and getting their businesses ready to be renting equipment online.
Ecommerce is no longer a bandwagon for the equipment rental industry. It’s a one-way train with no turning back.
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