Dive Brief:
- Wal-Mart is starting its holiday layaway program today, two weeks earlier than usual — although it did the same thing last year — as it eyes a second straight holiday season of high toy sales driven by “Star Wars” products timed with the release of the latest movie in the series.
- Analyst estimates suggest the program, which allows shoppers to buy products by paying on installments, could account for as much as 15% of holiday revenues at Wal-Mart stores in poorer areas of the U.S.
- Research firm NPD reports that toys inspired by "Star Wars" movies last year outperformed a healthy market for toy sales, growing by 9.4%.
Dive Insight:
Why mess with what worked so well last year? Wal-Mart started early layaway for the holiday during the same week last year, just as toys and other products related to "Star Wars Episode VII: The Force Awakens" arrived in stores. It also lowered from $15 to $10 its entry installment to put a product costing a minimum of $50 on layaway for the holidays.
This year, "Star Wars: Rogue One" is arriving in theaters just before Christmas on Dec. 16, and that means a new batch of related toys hitting store shelves in the coming weeks.
This move seems like a no-brainer, although Wal-Mart's change-up in its normal layaway strategy isn't just about this particular movie franchise. It's also happening as many retailers in recent years have been reviving the practice of allowing consumers to buy on layaway by offering new policies and better payment terms.
"We view layaway programs as a compelling option for cash-strapped consumers as they allow for the stretching of payments without the need for credit," Moody's lead retail analyst Charlie O’Shea said in an email to investors. "In addition, for larger items, space-starved consumers basically get free storage as well."
Ultimately, layaway programs seem like a great way to get people to pull the trigger on purchases instead of mulling them over at length, and if retailers offer friendly payment terms and position these programs the right way, they can lead to positive customer shopping experiences. If Wal-Mart's success with early layaway last year is any indication, it's working. Maybe it's time to get that light saber you've always wanted.
