Okay, Wal-Mart decided to do away with layaway and consumers who used the service were really disappointed. It seemed to many that few retailers (Kmart was one exception) understood their financial situation and the real need they had for some form of a layaway program.
Now, a new service called eLayaway is bringing the same type of service online by offering consumers the means to develop a schedule to pay for items over time before they take delivery.
The company currently works with a limited number of smaller merchants including shopperschoice.com, BSP Rewards, BBQGuys, DCS Ranges, Electric Grill Depot, Egg Guys, Outdoor Kitchen Depot, Ultimate Patio, Mermaid Marine Air, Fitness Pro and others including plastic surgeons and those offering outpatient laser eye surgery. The company has said it plans to add many others to its roster although it has yet to snag any big name chains.
The way the service works is a consumers choose eLayaway as their choice of payment when checking out online. They pay an initial 1.9 percent fee upfront for the service and then set a no interest payment schedule that fits with their ability to pay. Once full payment is received, the product is shipped or the service is rendered.
The company claims a number of benefits for the retailers in its program, as well. According to the company's website, almost half of all Americans spend more than they earn each year and eLayaway gives them the opportunity to attract shoppers that are overextended financially with high credit card debt, etc. This feature alone, eLayaway claims, gives merchants access to new groups of consumers who would never consider making a purchase for many items and services, especially those with high ticket prices.
The payment history of consumers enrolled in the program has an added plus for merchants allowing them access to insights on consumer behavior (identities not included) that will enable them to improve marketing efforts moving forward.
Discussion Questions: Do you see a future for online layaway programs such as eLayaway? Does a service such as this make sense for retailers that have dropped layaway plans or are the issues that caused them to be dropped still exist?