BIGresearch study shows Kmart gains with layaway
Home & Textiles Today Staff -- Home Textiles Today, June 19, 2009
Worthington, Ohio – Kmart drawing new attention from economically-stressed consumers taking a new liking to layaway, noted BIGresearch’s June 2009 report.
During the business development firm’s webinar covering consumer attitudes today, senior analyst Pam Goodfellow outlined the firm’s findings over the recent weeks.
Top of mind was consumer confidence, which Goodfellow said proved to result in “both good news and bad news.”
“The good news is that confidence has increased about 16% from a year ago, so it still remains about 30% below our ’07 heyday,” she said. “We are seeing a few groups that are slightly more confident than the rest. What is interesting, though, is that 36% of those [ages] 18 to 34 are showing confidence.”
She attributed this to several possibilities, such as many of them being “young Obama supporters” or being too early in their careers to see their retirement savings subside. They could be college students who “are still aren’t worried as much about their job situation currently.”
This month’s survey also found that as age increased, consumer confidence decreased. Confidence among those ages 35 and older fell below 30%, “which is likely due to these consumers’ rapidly declining wealth – home values, credit card debt, declining investments, 401Ks and such,” Goodfellow explained.
The survey also found that adults in the 35 to 54 age range are most worried about their job security. One in 10 still worries about being laid off.
“So with unemployment at a 25-plus year high, we aren’t looking for these consumers to recover from the recession any time soon,” she warned.
It is the youngest age bracket of consumers – 18 to 24 – who said they are most likely to focus on increasing savings. Additionally, paying down debt is a priority among those 35 to 54, while those 55 and older -- including many retirees – actually said that “nothing” was their priority and decreasing overall spending was a close second,” Goodfellow said.
Looking at a collection of retailers that included Kmart, Wal-Mart, Kohl’s, American Eagle and Nordstrom, among others, only the Kmart shoppers were really influenced by layaway services, according to the data.
“A quarter of [Kmart] shoppers deem layaway important when deciding where to shop or consider it when making a purchase, which in this index is much higher than the average consumer [shopping] other venues offering layaway like T.J. Maxx,” she said.
Electronics was the top merchandise category consumers would consider placing into layaway, followed by apparel and home goods.
But consumers appear to only count on Kmart for layaway.
“This figure may be discouraging for any retailer considering offering layaway at their stores: the majority of consumers say they would not shop a store more often if it offered layaway, and only 15% said they would,” Goodfellow cautioned.
Vouching for BIGresearch’s findings was Richard Hastings, consumer strategist, Global Hunter Securities LLC, who shared some of his own firm’s research on recent consumer shopping trends.
“Recently we saw an uptick in Kmart getting more 18 to 24 year old shoppers,” he said. “At the same time, we see Target seems to be losing just a little bit of the 18 to 24 year old category. This is very important stuff, regarding especially apparel, fashion, margin-rich categories, and therefore tells me more about earnings.”