Layaway is back!
Again a version of “what’s old is new again”. Layaway was once used as a “pay over time method” which allowed customers to have merchandise held allowing and make incremental payments overtime. It actually pre-dates credit cards as a method of payment. The concept was a way to help customers’ budget holiday purchases over a period of time. Toys “R” Us was one of the first to offer a layaway program and prompted other national chains once they saw the success of the program to jump in. Now Kmart, Wal-mart and Sears are among the national chains offering layaway programs. It’s too early to know all the benefits that a store receives by offering the program but here’s we do know at this time: It tethers the customer to store and creates the necessity for the customer to visit the store more frequently to maintain the layaway. Additional visits provide a great opportunity to make additional sales and built customer loyalty. The store is viewed as a retailer who recognizes the need of the budget conscious shopper and that in itself has a tremendous positive effect on the store’s image.
Should the independent retailer consider offering a “Layaway Program”? It depends on many factors such as demographics, the type of merchandise you sell and your ability to manage a program. If you sell to budget conscious shoppers and sell merchandise that kids want for the holidays it’s worth considering. You need to have a system in place to track the layaways and the capacity to store the merchandise until it’s picked up. It’s probably too late for this season but you talk to your customers and get their feedback. Any program that promotes customer retention and additional store visits if worth evaluating.