Layaway Every Day
While many retailers have done away with layaway programs, citing the high
cost of managing the programs and low comparative returns, others such as Kmart
have benefited from filling the void. Kmart’s parent company, Sears Holdings,
said it saw double-digit growth in the program between 2008 and 2009 as more
than three million went the layaway route.
According to Mark Snyder, chief marketing officer of Kmart, the company’s
research has found that 70 percent of consumers have changed their shopping
behavior as a result of the recession.
In an interview with CNBC, Mr.
Snyder said, "The recession has
taught [consumers] that they’ve got a ton of choices. They recovered their
full power as shoppers and they’re out there using it."
Many, Mr, Snyder asserted, are using layaway as they plan purchases to avoid
taking on further debt now.
"In February, she’s buying outdoor living
sets," Mr. Snyder said. "It’s
still snowing outside, but she knows in eight weeks they’re going to begin
to move outside again, [and] she wants a new patio set."
Questions: Will the demand for layaway programs lessen as the economy rebounds?
Will layaway be a valuable differentiator for retailers moving forward?