Modern Jewelry Trends

More consumers shopping this holiday season are putting their purchases on layaway. If you’re not old enough to know, that means they are making monthly payments to own an item that they’ll pick up when it’s fully paid for. Before credit cards were ubiquitous, layaway was much more common. Sears dropped it in 1989 (except for jewelry) and Wal-Mart in 2006. The only faithful fan has been K-Mart, who now sees its layaway program as a big competitive advantage. It’s even stepping up layaway promotions this year, betting that with many consumers up to their credit card limits and short on cash, layaway will be an increasingly attractive option. In fact, Sears just reintroduced layaway only for this holiday season and smaller retailers are jumping on the trend too. Perhaps layaway will make a comeback in jewelry stores too, especially for big-ticket must-haves like engagement rings.

“I know this is weird for a retailer to be saying this, but I’m very encouraged,” Kmart CMO Mark Snyder says in a recent interview with Brandweek. “You can sum up the reason why in one word: layaway. Kmart has had it as its core value proposition for the past 40 years, but this year it was obvious that where the economy was heading and the concerns that our shoppers had about being able to give a great Christmas to their families this year. They were looking for options that would help them budget better and layaway turned out to be the thing that was most interesting to them, most compelling.”

Many retailers of large items don’t like layaway because of the space needed to store items. In previous years, some layaway items were actually stored in rented trucks parked at stores before the holidays.

Why not just save up the money and buy the item? As moms can testify, sometimes saving up and waiting until the last minute may leave you without the season’s must-have toy or game console. Layaway reserves an item and also keeps it hidden from curious kids, since the retailer keeps it until it’s paid for. “To be able to go out to Kmart and get those things while they’re fresh on the shelves and know that you’ve got them put away and know that you’re making payments on them every week and you can pick them up before Christmas, that’s a pretty good feeling,” Snyder says.

For retailers contemplating the renewed popularity of layaway? Not such a good feeling: remember, layaway was invented during the Great Depression.

This entry was posted on Monday, November 24th, 2008 at 4:26 pm and is filed under Consumer Pulse. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.