Marketing to Women: 3 Reasons Holiday Layaway Is Back
November 5, 2010 § Leave a comment
K-Mart made big news during the recession by bringing back layaway for Christmas. For most people, layaway went away with the emergence of credit cards that allowed you to purchase on impulse without immediate worries about payment. The recession has made all of our purchases more thoughtful, and many Americans are striving to cut down on debt.
For those of us who remember when your Christmas presents came from the local department store, this old-school concept brings back fond memories. Memories of Christmas window shopping on Main Street, sitting in Santa’s lap, and our Moms putting special gifts in layaway at the little window at the back of the store. Back then, credit was not as pervasive, and the options were cash, a store charge or layaway. Layaway and bank Christmas Clubs went hand in hand back then.
I was conducting some focus groups with women shoppers recently and heard some of the reasons that layaway is back!
1. Layaway is a great alternative to managing a budget. No more January surprises of credit card bills with forgotten charges. And no finance charges.
2. Those without credit or maxed-out credit limits can make purchases and not have to pay it off all at once.
3. It’s also a good way to get a jump on the holiday season and ensure that you get the item your child wants before it is out of stock.
“In the last couple of years it has emerged as a popular spending trend for consumers,” according to a National Retail Federation spokeswoman and reported on CNN Money.com. “With the change in the economy it is a very viable option for families that want to spread out their spending over the holiday season. Avoiding debt has been a big concern for consumers.” In fact, last year the number of consumers who planned to purchase holiday gifts with their credit card fell 10%, according to NRF’s holiday consumer intentions and actions survey.
Stores like K-Mart and Sears have added an online layaway this year that allows you to shop online, pay over time and then pick up the merchandise in-store. This new option has introduced younger consumers to this what’s-old-is-new-again marketing tool.
Kmart says it saw double-digit increases in its layaway customers and sales from 2008 to 2009 after an online/offline campaign to promote layaway—a feature that its big rivals in the value segment, Walmart and Target, discontinued in 2006.
Even more consumers this year are expected to be grappling with paying down credit-card debt or facing sharp cutbacks in their credit limits. So ideas that make paying for holiday gift in cash—like layaway, or like the Christmas savings clubs that Sears and Kmart utilize—may have even greater appeal this year.
Other stores offering layaway this holiday season include T.J. Maxx, Burlington Coat Factory, Marshalls and Toys R Us.