Kmart says that foot traffic to its stores has increased, thanks to its Layaway program and early Black Friday deals. Sales have increased in Kmart stores inspite of a bad economy and consumers are spending money. Kmart was bought by Sears a few years ago and has made a head start this holiday season to snatch away consumers going to its rival stores.
Kmart is also thanking its Layaway credit program for letting consumers buy what they want. A Layaway program allows a consumer to buy a desired item by putting down a down payment, service fee and cancellation fee. The store will reserve the merchandise for the consumer and allow the consumer to make biweekly payments towards the merchandise.
Walmart and Target got rid of their Layaway programs a few years ago citing huge costs of running the program. But looks like the Layaway program is paying off for Kmart. According to KHNL, a Kmart representative had very positive things to say about their Layaway program :
“It’s popular,” said Kehaulani Decherong, a K-Mart customer service representative. “A lot of people have been calling to find out when we’re going to reopen again and when we did, we had a lot of customers.”
It’s an eight-week program, where you put 10 percent down or $15, whichever is greater. You pay a little each week, and once it’s paid off, you can take your goodies home.
“With the prices going up so high, not everyone can afford to buy what they want for their children for Christmas all at one time,” said Decherong. “So that’s why our layaway plan kicks in.”
A website www.elayaway.com specializes in bringing layaway deals to consumers. elayaway allows consumers to buy products without taking on any debt. Instead consumers can set their monthly payments to pay towards to the cost of the merchandise. elayway is sure to see more traffic this shopping season as the economy continues to go down.
The Wall Street Journal is wondering if Layaway is the new credit card in this economy? Wal-Mart and other big retailers like Target should reconsider their layaway programs. Bringing back Layaway programs will only add more incentive in bringing customers back to their stores this holiday season. Wal-Mart’s layaway program was hugely popular and its shutdown irked a lot of Wal-Mart loyalists back in 2006. Online petitions were launched asking Wal-Mart to reconsider, but Wal-Mart did not budge. Will lowering consumer spending and a drop in sales during the holiday season convince Wal-Mart to bring back its Layaway program. Only time can tell.
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