After the era of the Great Depression in the 1930s, retailers nationwide offered an innovation to help consumers shop without having to pony up cash right away. It was called layaway.

Different retail shops had different discretion in how they ran their programs, but structurally speaking, they are all the same. Customers pick out their desired product, give a downpayment, and then the store would hold them for a set amount of time. The customer will pay the remaining amount over the course of a few weeks or months until the full price of the product is paid. 

Anthony Eisen, CEO and managing director of Afterpay, noted in an interview with PYMNTS, “Millennials want something different. We founded Afterpay with the idea that this isn’t a credit product — it’s a financial management tool for customers and a recruitment tool for retailers who are looking to enhance how they interact with the consumer.”

In the modern day, layaway has already been a game-changer for consumers in Australia, where it launched. 

He further added, “What we are trying to build and offer in some ways is like the purest form of layaway, redesigned for the digital era. They are getting their goods up-front, but they aren’t paying anything extra for the goods or the service. Instead of creating debt and then paying extra for that debt, they are paying it all off in a short installment period.”

“Wanting to be able to go and buy what you want, when you want or need it, isn’t just a millennial trait. This is something we have seen in every demographic.” This is why, he noted, the agenda for 2020 is about bringing that option to even more consumers.”

Afterpay realized that aside from focusing on how to change consumer behavior, it is better to provide them with better tools to teach them how to act, behave or pay.

Source: PYMNTS


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