What is the layaway? A New Generation of Buyers Discover the Old ‘Buy Now, Pay Later’ Policy
As the economy continues to stagnate amid the ongoing pandemic, retailers appear to be offering customers an alternative to buy now, pay later to buy commodities.
Saks Fifth Avenue, Amazon, and Target are just a few of the notable retailers offering the option to buy. Layaway programs offer customers the option of paying for items over a period of time without any additional interest.
“Generation Y and Generation Z saw their parents go through immense hardships [during the financial crisis] where the American consumer was over-indebted ”, Rafe Petkovic, Columbus revenue director, told NBC News. “Consumers today are certainly waking up, and it has been a significant acceleration in the market opportunity here today. “
As the pandemic continues to reshape the online retail industry some experts believe layaway shopping will become a staple for all stores in the near future.
“I think it will be as ubiquitous as free shipping,” Quadpay co-CEO Brad Lindenberg told NBC. “Each site, I think within a few years, will have the option of paying in installments.”
Before the pandemic, consumers were already changing their spending habits and moving towards layaway shopping and similar programs, with young customers taking quick loans from Affirm, Afterpay, Klarna and Quadpay in order to make purchases, and businesses all reported a peak in app downloads during the year and the official start of holiday shopping.
Klarna reported a 106% increase in app downloads from last year and five times more transactions over the weekend of Black Friday, while Affirm saw growth of 163% and 200 respectively. % of home fitness and home office sales. Afterpay also saw a 186% increase in sales over the Black Friday weekend.
As the pandemic rages on, some experts believe consumers will continue to change their spending habits.
“Although the first three months of consumer debt and credit data from the current recession paint a positive picture of consumer finances, unemployment reached all-time highs in 2020,” the bureau reported. “As incomes decline and stimulus aid continues to disappear, consumer finances may change as people seek ways to cover their expenses,” an Experian report declared.
