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Ten Ways to Spot a Layaway Shopper this Holiday Season

November 19, 2012 Leave a comment

While several major retailers, including Walmart, Kmart, and Toys R Us, have lowered or eliminated their layaway fees in efforts to spur holiday shopping, new insights from the BIGinsight™ November survey of more than 9,000 consumers reveal that this tactic doesn’t seem to be leading to a rise in this place-it-on-hold-and-pay-over-time purchase behavior. Just over one in ten holiday shoppers (12.3%) indicates they are using or planning to use layaway when shopping for gifts this season, relatively unchanged from one year ago (12.7%).

With a flatlining number of consumers boarding the layaway train for 2012, it appears that this Great Depression-era policy is more bygone gimmick rather than a modern day marvel. However, further analysis of layaway users uncovers a specific type of holiday shopper. So without further ado, let’s take a look at ten characteristics that help identify this special group of consumers.

Ten Characteristics of Layaway Shoppers

1. Layaway shoppers wouldn’t place in a Santa look-a-like contest. Nearly 75% more likely to have children in the household compared to average holiday shoppers, while layaway users might be more prone to play Santa this year for the kiddos, they just won’t look like the jolly old guy. Six years younger on average than typical holiday shoppers, layaway-ers are also far less likely to refer to themselves as “retired.”

2. Despite tighter budgets, layaway-ers intend to spend more this holiday season. As might be expected, those utilizing the budget-friendly aspects of layaway tend to earn less (about $49,000 per year) than holiday shoppers in general ($56,000/year). Despite this, though, two out of five (41.6%) layaway shoppers intend to spend “more” on the holiday season this year than they did back in 2011. Just 21.0% of shoppers in general are working within expanded holiday budgets this year.*

3. Layaway shoppers have a holly jolly outlook for the economy… Consumers reported that they were feeling better about the economy in November, but the sentiment among layaway users is downright giddy: 54.7% say they are very confident/confident in chances for a strong economy, much higher than typical holiday shoppers (40.4%). The issue of employment, though, is another story. About a third (32.7%) of layaway shoppers fears an increasing in the number of layoffs over the next six months, higher than holiday shoppers in general (22.0%). Layaway-ers are also slightly more concerned about becoming laid off themselves.

4. …Yet remain conservative with their everyday finances. Lower average incomes and greater concerns for layoffs are likely playing into layaway shoppers’ penchant for scrimping and saving in their everyday lives. Compared to holiday shoppers in general, more layaway-ers are making plans to pay down debt (38.6%), decrease overall spending (35.4%), and increase their savings (32.5%) over the next three months. Additionally, a higher proportion (28.6%) is attempting to pay with cash more often, which brings us to point #5…

5. Cold hard cash is key with layaway shoppers. For holiday purchases specifically, while debit cards are the preferred method of payment among layaway shoppers (49.9% plan to use them most often), more than a third of (35.5%) still plans to utilize cash most often, 40% higher than holiday shoppers in general (25.2%). Layaway shoppers are 60% less likely to use credit cards most often for holiday purchases than typical holiday shoppers.*

6. These early birds are getting the worms… Arguably one of the brightest benefits of using layaways services is the ability to place a hold on hot holiday merchandise before it flies off the shelves. So it shouldn’t come as a surprise that – as of early November – seven out of 10 layaway users (69.1%) had begun their holiday shopping as opposed to just 52.8% of holiday shoppers in general.*

7. …But still plan to bargain-hunt with the best of ‘em on Black Friday. And speaking of early bird tendencies, layaway shoppers are quite the night owls too: the majority (56.3%) is planning to shop Black Friday weekend, making them 75% more likely to brave the crowds than typical holiday shoppers (31.5%).*

8. Layaway shoppers use their connections to find best deals. While traditional advertising circulars are their top source for keeping track of holiday sales and promotions, layaway shoppers are more likely to connect on Facebook or Twitter, use retailer apps, and refer to coupon websites (i.e. RetailMeNot.com, FatWallet.com) compared to holiday shoppers in general.*

Do you plan to use any of the following to keep track of retailers' holiday sales and promotions this year?

9. While they embrace their inner fashionistas, it’s electronics and toys that are bound for the layaway bins. While layaway shoppers are more likely to lean to familiar fashion labels and the newest trends/styles versus holiday shoppers in general, apparel is less likely to be put on hold compared to electronics and toys.

Do you plan to or have you already put holiday gifts in Layaway for any of the following merchandise categories?

10. Discounters are most likely to get those layaway dollars. When it comes to the retailers shoppers are utilizing for layaway services, discounters score a definitive win here. Nearly two-thirds (65.5%) of holiday shoppers planning to use layaway this season will head to Walmart, while 42.2% say they will sign up with Kmart. Fewer will make use of the programs at Toys R Us (21.2%), Sears (15.2%), Burlington Coat Factory (12.4%), Marshall’s (12.1%), or TJ Maxx (9.9%).

* Source: National Retail Federation/BIGinsight™. For more insights on the holiday season, visit the NRF’s Holiday Headquarters.

This post originally appeared on Forbes.com as a contribution to the Prosper Now blog.

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“Fair is Fair” but is Square…well…Square?

March 22, 2012 8 comments

As any self-respecting child of the 80’s knows – “Fair is Fair.” Doesn’t the theme from that nearly 30 year old [ack!] cult classic take you back? Pat Benatar, anyone? Supergirl? An undying love for Christian Slater? But I digress…let’s hop out of the DeLorean and evaluate what really got me thinking about “Fair is Fair”:

JC Penney’s new “Fair & Square” Ad Campaign

The complete overhaul of JCP’s marketing, merchandising, and promotions plans certainly made headlines in the retail community, but what do consumers really think about this strategy switch-up? In addition to being practical and realistic in their purchasing, today’s shoppers are also “intelligent”: researching products, comparing prices, stalking sales, and couponing like crazy.  And, consumers are all the more informed when aided by their mobile devices. Knowing all this, it seems that JCP’s new “Fair & Square” approach might be as dated as a Flock of Seagulls hairdo. So who’s buying what JCP’s selling?Hot or Not? JC Penney's "Fair & Square" Ad Campaign

In our March Consumer Survey of more than 9,000 consumers, we put JC Penney’s “Fair & Square” Ad Campaign to the test in our monthly “Hot or Not?” feature. As it turns out, more deemed it “not” (58.3%) than “hot” (41.7%) – placing “Fair & Square” in the middle of the pack compared to the other items we polled this month.

But who are the two out of five customers who have at least had their interests – if not their wallets – piqued by “Fair & Square”? These shoppers are more prone to be women (59.9%), married (53.2%), middle-aged (46.7 years, on average), and earning about $56,000/year…sounds like JC Penney’s typical Women’s Clothing shopper.

Is that not interesting enough for you? Let’s take a look at “Fair & Square” from a different perspective – Women’s Clothing shoppers from competing retailers.* Interestingly, fewer shoppers at Walmart – home to the somewhat similar EDLP pricing strategy – warmed up to the idea of “Fair & Square.” Macy’s, Nordstrom, and Old Navy shoppers were relatively more excited by the concept than Kohl’s or Target loyalists:

JC Penney's "Fair & Square" Ad Campaign is HOT

From this standpoint, it appears that most shoppers have a so-so opinion of “Fair & Square” so far. Perhaps they’re walking into JCP to see what all of the fuss is about, but whether or not they’ll convert to the retailer over the long haul remains to be seen – as does the department store’s ability to retain its current customer base.

Ah, Love Retail is a Battlefield.

For more information on this data, please contact BIGinsight™.

* A selection of Women’s Clothing retailers was analyzed for this report. “Women’s Clothing Shoppers” are defined as those who shop most at a given retailer for Women’s Clothing (an unaided, write-in response).

Source: BIGinsight™ Monthly Consumer Survey – MAR-12 (N = 9242, 3/6 – 3/13)

© 2012, Prosper®

BIGinsight™ is a trademark of Prosper Business Development Corp.

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