Sears is extending its popular layaway program to home appliances.
The nation’s largest appliance retailer already offers layaway—which allows consumers to set aside store items and pay for them in installments—on fitness equipment, home entertainment and cookware. Now it's including home appliances in the program for the first time.
Sears is running in-store ads, as well as ads on its site, Sears.com. One ad, for instance, alerts consumers that layaway is available on both online and in-store purchases. “Reserve great gifts for everyone on your list & make it easy on your budget,” ads read.
The retailer was one of the first to create a layaway program during the economic downturn. Though layaway was a seasonal phenomenon during Christmas, Sears brought it back permanently in 2009 due to positive consumer feedback and demand. Here's how the new home appliance program works: Consumers must first put down a down payment of $15 or 20 percent of the product’s total cost. They can then make bi-weekly payments until the contract’s term is up. (Consumers must also pay a $5 contract initiation fee.)
More than 33 percent of Americans “would consider using layaway for home appliance purchases,” per Sears. "Layaway has proven to be very beneficial to our customers given the tough economic environment. Therefore, extending layaway to home appliances is the natural evolution," said Sears rep Shannelle Armstrong.
Sears sister brand Kmart has also been aggressive on the layaway front. The trend had moved from being a “seasonal” to a “year-round” program, heavily utilized by consumers, said Kmart CMO Mark Snyder in an April interview with Brandweek. Both brands have launched layaway-like efforts to get consumers to spend. Last year, Sears and Kmart rolled out a “Christmas Club Card” promotion that enabled consumers to put money towards holiday purchases, as well as a “Christmas Lane” shopping portal where consumers could start their Christmas shopping early.
Such efforts were widely viewed as a way-to-early holiday sales push, but what Sears and Kmart “were really pushing was layaway,” said Suzy Sandberg, president at PM Digital, a digital marketing agency.
Sandberg added: “Layaway is definitely something that is time-sensitive right now, [especially] with people getting their credit card lines reduced. It’s a plan for people that doesn’t get them in trouble.”