The Asda Grotto: The Early Bird Catches the Worm

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Layaway card saving schemes are re-introduced by Wal-Mart/Asda as early as August.

With the huge impact global financial depression has had on local economies – it is not surprising that more families are faced with concerns over how they will face the cost of this coming Christmas. The popularity of saving schemes, usually associated with poorer aspects of a national population, are now showing a dramatic increase in customer uptake. It seems that not only are the families have to go back to ‘grass-root’ saving strategies. Many of the larger shopping cooperation’s will have to re-vitalise their savings schemes to suit this new requirement. Many stores who let go of their ‘layaway’ or card saving schemes in the 1980’s are now finding that they have a direct impact on customer loyalty and have re-introduced them as an ‘early bird’ incentive before Xmas.

The idea of a ‘layaway’ scheme is to offer the customer store focused savings account – money that will be used to support spending at key holiday and high days. The store offers discounts and incentives to the customer who put their money within the store account. This is an ideal relationship, as the customer ties itself to a particular store and through a loyalty process, receives more back than they put in – a symbiotic relationship.

But the competition for loyalty is now heating up with Asda UK (brand of US Wal-Mart stores) and many of the other major supermarkets looking for your cash very early this year. They are offering their part-time ‘layaway’ saving schemes, up to a month earlier, by the promotion of Santa’s Grottos in August! For some this early reminder is just a little pre-emptive. However, for the US it may be particularly relevant as the November elections may have a direct impact on public feeling – Wal-Mart is very keen to tie in customer savers now. There are Christmas grottos in 17 of Asda's 540 stores around the UK, but the supermarket group said they would stay open only until the end of this weekend.

Tom Packer, CEO of commented, “It’s no secret that Christmas shopping causes many headaches the nearer it gets, consumers who start to think about now will make great savings so it’s worth starting to get your head around even if we haven’t entered September yet! Also, what a great PR stunt from Asda!”

It’s a sharp reminder to their customer base that Christmas is only four months away. This drastic measure is designed to remind the cautious shopper that they should begin saving their money on store cards as soon as possible. There is an upper limit to how much the customer can save – but this is boosted by a bonus amount from the store for the savings amount. Therefore, the client gets more for their money and the store keeps the customer in shop.

It is widely held belief that there is a symbiotic relationship between in-store credit card and the layaway scheme/card. Sears, for example, offer layaway schemes throughout the year and believe it to be an intrinsic part of the Sears shopping experience. They can a use layaway to pay for online products and services which serves as an alternative budgeting tool and a means to avoid debt. Products and services that have layaway offerings online can offer significant variety – and don’t have to stick to the simple products seen in store. Toys R Us also re-introduced layaway and offer a 90 layaway plan – on all items in store for all year around spending.

The question is – is this the next evolutionary step in the Reward scheme process? Tesco’s, Marks & Spencer’s and Sainsbury’s are sticking rigidly to the Rewards system but will now send out money gathered over an entire year at a requested time – which is not a far cry from the layaway mentality.

Is this a new shopping strategy that most shops will adopt? Many customers feel the sense of loyalty both ways - using saving reward schemes. It has been shown that many customers are now turning their backs of the National Banks as they feel that they are globally responsible for the financial crisis they are looking towards their local stores that allow them to both save and spend – with fringe benefits. It seems that there is both a new bird and new worm may be on the shopping horizon.

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Tom Packer
Mindwork Labs Limited
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