Buckle, a youth clothing retailer based in Nebraska, has a traditional approach to its business for its mall-based stores. The US retail chain, which opened its first store in 1947 and has more than 380 across the country, now offers “layaway” – a service that allows customers to have an item set aside and pay for it in regular installments.
The arrangement, a feature of retailing in the 1940s and 1950s, faded as credit cards and credit accounts became widely available. Wal-Mart, for instance, closed its lay-away program in 2006 although the trend has reemerged at Kmart and Sears over the past year. As the downturn takes hold and consumers find credit harder to obtain, layaway has proven to be a good marketing tool.
Buckle – which has been using its layaway program in its limited store advertising online – dramatically outperformed the rest of the retail sector in November and December, reporting double-digit gains in comparable sales.
Layaway makes sense, he says, when an item is scarce and consumers do not have access to adequate credit. It appears that the Buckle layaway program targets teens and college students who often don’t have access to credit.