October 3, 2012
Purdue expert: Retailers see potential in early layaway programs
WEST LAFAYETTE, Ind. — Retailers' early and aggressive layaway programs are a sign of their concern about the purchasing power of lower-income consumers despite a generally positive outlook for this holiday season, says Richard Feinberg, a Purdue University professor of consumer sciences and retailing.
"Retailers are particularly worried about lower-income consumers," Feinberg says. "And for those consumers, the question is not what am I going to buy, but how am I going to be able to pay for it. Any retailer that offers a way to do that will be rewarded."
Offering layaway earlier in the season also is key, he says.
"By starting now, the retailer creates a longer time frame to pay for layaway items," Feinberg says. "Anecdotal conversations with consumers indicates that if given nine weeks of layaway, many of them could buy items that they couldn't get if given only five weeks to pay."
For retailers, the reward for offering a layaway program isn't huge growth in sales over last year but a marginal increase, Feinberg says. "A 1 percent increase or decrease in sales can mean millions of dollars for a retailer. And if it's a move on the upside, that means money denied to competitors."
Writer: Judith Barra Austin, 765-494-2432, email@example.com
Source: Richard Feinberg, 765-491-5583, firstname.lastname@example.org