I had said that layaway programs will definitely increase in popularity compared to last year. However many credit-strapped US consumers may not have the financial and mental discipline to take the offer.
Apparently I was wrong. According to this FT article (click here), Kmart said this month that its December sales "benefited from a year-over-year increase in sales made through our layaway programme". Sears will now continue its pre-Christmas layaway programme, which it said had met a “quite positive” response and “incredible” customer feedback.
Some other interesting perspectives:
- Tony Gao ( Northeastern University), says that layaway makes sense only when an item is scarce and consumers do not have access to adequate credit.
Janet Hoffman, global managing director of Accenture's retail consulting practice, says for most modern retailers the practice is unlikely to make a return. Given its comparatively limited demographic appeal, she says, "lay-away has significant limitations as a strategic move ...". She also points out that administering a layaway programme presents challenges for modern retailers' inventory and sales management systems.
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