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Are Layaway Programs Part of the Answer to the Credit Crisis?
Last week's edition of the always interesting RetailWire newsletter asked whether "conditions were right for a layaway comeback." In the opening article, George Anderson pointed out that layaway programs, which were created in the 1930s, were fairly common before credit cards became widely available. However, he writes, very few stores still offer them.
The newsletter's Braintrust panel was then invited to discuss two questions: Will consumers cut back on their use of credit cards in making retail purchases considering current economic conditions? Is the time right for layaway programs to make a comeback at retail?
Their responses brought to light several interesting points. The majority of the respondents thought it would be a good move for retailers to offer a layaway option. However, Canada's own Kevin Graff, president of Graff Retail, wrote that he doesn't "envision that layaway programs will be much more than a small blip on the screen for most merchants." He says that in this age of instant gratification, consumers will want the product now. "More likely to work," he writes, "is a strong push on in-store credit card programs."
Gene Detroyer, an independent Braintrust panelist, also cited the instant gratification factor as being a roadblock to bringing layaway back. "Consumers have been trained over the last 50 years to buy this way," he explained. "It will be very hard for most to fight the inertia. The US does not have a savings culture. When is the last time you saw an ad for a Christmas Club?" In addition, he pointed out that while layaway is nice for retailers to offer, it has costs for them in terms of storage and management of the program.
What do you think? Is layaway part of the answer to the credit crisis? Is it a service your customers would use?
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Lori Smith, , Editor-in-Chief
Lori Smith is the editor of Gifts and Tablewares, Canada's premiere gifts and tablewares magazine. Written for retailers of gifts, tablewares, housewares, stationery and home furnishing accessories, its objective is to help readers increase their sales and run their businesses more profitably by providing information on new products, merchandising, small business management, customer service, consumer behavior and industry news. The magazine is published six times a year by BIG Magazines, LP, a leading Canadian information company.
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This page contains a single entry from the blog posted on October 29, 2008 2:42 PM.
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