Just about every retailer is either launching or considering programs to get customers the products they want as fast as humanly possible. Amazon’s same-day and one-hour delivery options might be the industry standard — and as other merchants chase that kind of success, customers will most likely come to expect prompt service from every retailer they interact with.
However, retailers also can’t forget about those other customers who are just fine with taking it slow and steady.
Retail Dive reported that several retailers have already made moves to supplement traditional layaway programs with added features and options ahead of the holiday shopping season. In particular, Kmart has opened a no-money-down layaway program for shoppers who want to guarantee they’re able to get the best gifts without worrying about empty shelves come December.
“Even if their paycheck isn’t coming in for another week, it gives our members an option to put it on layaway right away,” Jai Holtz, president of financial services for Kmart’s parent company Sears Holdings, told Retail Dive. “It has been something our members have used consistently year after year. We see it as a key driver of sales—especially at the holidays.”
Walmart has also been quick to respond to a resurgent demand for layaway services. The retailer lowered minimum deposits for items on layaway to just $10 with 10 percent down. Both Walmart and Kmart have extended the starting point of their programs well before the Thanksgiving weekend, which Richard Feinberg, professor of retail management at Purdue University, believes makes sense for retailers looking to give customers more cushion in a growing economy.
“By starting now, the retailer creates a longer time frame to pay for layaway items,” Feinberg said. “The need for a retailer to use layaway depends on the target market. There has been a big battle for the lower-end consumer.”
It’s not just general retailers that are getting into the layaway game, though – even merchants selling more modern products like video game purveyor Gamestop see the value in letting consumers lock a sales in before actually paying for them. In a Thursday (Oct. 1) press release, Gamestop announced that customers would be able to reserve new games and console bundles for only $25 up until Dec. 24.
“The holidays have a tendency of sneaking up on people, and causing stress during a time meant for joy and sharing gifts with loved ones,” Eric Bright, director of merchandising at GameStop, said in the press release. “We have listened to feedback from our customers and are starting layaway earlier than ever before this year.”
While the benefit of layaway programs for customers is clear, Feinberg explained that retailers have just as much incentive to drive purchases through delayed-payment options. As customers make successive payments, each transaction could be a way to drive incrementally higher sales on other products, and while those won’t put retailers in the black, they can have a cumulative effect come the end of the shopping season.
“A 1 percent increase or decrease in sales can mean millions of dollars for a retailer,” Feinberg told Retail Dive. “And if it’s a move on the upside, that means money denied to competitors.”
Layaway programs aren’t going to revolutionize retail in the age of eCommerce, but they can be an essential part of a multichannel strategy, as Kmart, Walmart and GameStop clearly already believe. As more companies hop on the layaway bandwagon, though, consumers might see something of a bidding war as retailers boast lower minimums and new payment features to lure your deposits and not-yet-spent dollars over to their registers.
After all, a bird in the hand might be worth two in the bush, but in retail, $2 tomorrow is better than $1 today.