“Layaway” may be one of the least dazzling words in the English dictionary. For many, the word surely conjures up TV ads featuring loud salesmen pushing dinette sets and sofas. But layaway—along with other installment-based payment plans—has a rising profile within fine jewelry and other luxury consumer categories.
As digital consumers, we’re increasingly being offered layaway and buy-now-pay-later plans on our checkout pages. And not only from online titans such as Amazon and Wayfair. Established fine jewelers including David Yurman and Kendra Scott, along with small-to-mid-sized brands and retailers including Reeds Jewelers and Verlas, now offer extended payment plans.
Just a quick distinction: buy-now-pay-later (BNPL) plans allow you to receive a piece of jewelry instantly while paying it off over time, while layaway allows you to lay claim to a piece, but only after you’ve paid off an installment plan. Both programs are, generally speaking, more attractive than traditional credit cards for consumers—because they don’t charge high interest rates or unnecessarily complicate credit profiles.
Jessica Sitko, owner of Trademark Antique, a Lewisburg, Penn.-based online purveyor of antique and vintage fine jewelry, offers customers a layaway option, and says she strives to “make layaway normal” in her brand’s messaging, and at checkout.
She also views layaway as a savvy business stratagem. Having customers on monthly plans makes her financial picture less tumultuous—she has a steady flow of income all year: “One-third of our sales are layaway and that gives me a very predictable monthly income that I can count on; some of our very best customers who spend the most with us in a year do layaway. It’s been that way since 2015. They’re repeat customers and they lay away every time.”
For retailers who use popular e-commerce platforms including Shopify and Square, it’s easy to implement the option of payment plans, as those sites partner with fintech companies, chiefly San Francisco-based Affirm and Swedish company Klarna (others in the space include Afterpay, Pay Pal Pay in 4, Sezzle, Quadpay, Four and SplitIt).
We spoke to several retailers who’ve partnered with Affirm and they all reported that for many shoppers it has a softening effect; a $4,000 diamond ring purchase feels less scary when it costs $500 a month. The options allow consumers financial flexibility. And though in-store payment plans for engagement ring have existed since De Beers’ “A Diamond is Forever” slogan hit the streets, opting for layaway online—with its easy “click once to see your terms” functionality—is less fazing for consumers.
Cory Kwiat, chief digital officer at New York-based diamond jewelry brand Kwiat, says, “We like offering our customers the option to pay over time with Affirm because it provides flexibility and options for an important purchase.”
San Francisco’s Affirm also partners with all the retail brands in Signet Jewelers’ portfolio, including Jared, Zales, and Kay. And to give you a sense of how fast it’s being adopted: in the second quarter of 2022, the company added 168,000 merchants to its list, a whopping 2,030% increase from the same quarter of 2021. Active Affirm consumers now number 11.2 million, which represents a 150% increase over the 4.5 million consumers in the same quarter last year.
Retailers like Affirm’s flexibility for consumers—payment options can range from six weeks to 60 months. And for shoppers, there’s no cost to apply and the firm can prequalify them based on pieces of information that never affects credit scores (including name, phone number, email address, and date of birth).
Each loan is unique to the customer and can be paid bi-weekly (always interest free) or monthly (with APR ranging from 0-30%). Total cost is shown up front and if the customer misses a payment, there are no late fees. Instead, they send email reminders. For the end-user—the jewelry consumer—terms like these easily trounce those offered by credit card companies.
A study on consumer spending released by Affirm last year underscored the burgeoning popularity of installment plans. The study found that 56% of Americans said they were interested in a pay-over-time option in 2022, and 49% of Americans (and 68% of Milliennials) said they won’t purchase if they don’t have the option to pay over time.
The Affirm system is equally attractive to retailers who like that the company guarantees every purchase, unlike traditional credit cards.
Harvey Rovinsky, president of 60-year-old Bernie Robbins, which has six stores in New Jersey, says, “We use it to close sales. It’s interest-free financing and it allows our clients to make larger purchases. I would certainly recommend it to my peers. It’s another arrow in the quill, so to speak. Jewelers that don’t use it are missing a huge opportunity.”
In addition to Affirm, Houston-based Dayyani Jewelers uses several buy-now-pay-later companies, including Klarna, Bread Financial, and Acima. Chris Mazloomi, marketing and operations manager of the three-year-old company, says, “We want to have more outreach to more clients, so we take on the liability. We do this for potential. It brings people in the door.”
And as economic headwinds mount for jewelry retailers—fueled by inflation, the war in Ukraine, and supply chain disruptions—gifting consumers with greater flexibility in how they can purchase jewelry can only strengthen bottom lines.
“With financing, the customer’s buying power goes up,” Mazloomi asserts. “If they get a ring, with financing, now they can get a ring and a pendant.” —Kristin Young
Photo by Liza Summer/Pexels
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