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Retailers have re-introduced layawayto consumers this holiday season, and it seems to be popular. Analysts say that consumers like layaway because they don’t have easy access to credit, many are unemployed, and layaway makes them feel disciplined during the busiest shopping time of the year. While there’s no reason to believe these hypotheses are false, I think they miss the broader insight. Today’s average consumer is conflicted about money and how it relates to things they desire. The layaway trend is a clue that smart marketers should factor into brand strategies.
When I was 17, I wanted a Bianchi Brava bicycle. It was a beautiful piece of Italian craftsmanship. It also cost about $1,000, which was a lot of money for a high school kid in the 1980’s. I had a part time job. Every two weeks, when I cashed my paycheck, I visited the bicycle store and made another installment payment towards the bike I’d put on layaway. I grew up in a middle class home with no shortage of nice things, but the day I rode home on my Bianchi for the first time was a thrilling consumer experience. I earned it. I didn’t borrow and it wasn’t a gift. I had to work to make it mine, and it was so charged with meaning that I kept it in my bedroom instead of the garage.
Here’s the brand reality check: how hard would a consumer work to get access to your brand? Would they be willing to save for it, or is it something they’d be much more inclined to purchase with easy credit on an impulse? We’re willing to make sacrifices for the brands we value most. We tend to be fickle about the others. Consumers think of price in two ways: as an indicator of quality (as when they select a good wine based on its price point—“it costs more, therefore it must be good”) or they think of it as a sacrifice (as when they price shop to determine which store will set them back the least.) Unlike credit, where the sacrifice seems distant and manageable, layaway makes the consumer concentrate on what they’re parting with in order to get the brand. That act of sacrifice makes the brand worth more. This is especially true when you make a sacrifice to acquire something you intend to gift. Yet few brand marketers measure the degree to which their target consumer would be willing to make compromises in order to sustain their relationship with the brand. That’s a missed opportunity.