Thursday, April 30, 2009

Kmart Smart?

Big Kmarts offer nonperishable groceries, but Kmart's full-serve grocery extension lags Walmart and Target.

Mark Snyder's Challenge

Back on April 1, Chief Marketer ran an interview with Mark Snyder, the chief marketer at K Mart.  Mark Snyder took the job with Kmart about the time the stock market collapsed in 2008. 


What Mark inherited was a Kmart brand that was fairly worthless.  On just about every attribute, Kmart's image was worse than Target and Wal-Mart.  As Snyder put it, Kmart had "pretty heavy negative perceptions."  I'll say…I think its image could best be summed up in one word—"loser." 


I once did focus group research with teens about discount stores.  I'll never forget this one girl describing her feelings when her Mom insisted they go to Kmart.  She said, "I would stay in the car in the parking lot, lock the doors, roll up into a ball underneath the dashboard and pray that nobody I knew would see me."  K Mart was not exactly the brand people wanted to be associated with.


So Snyder's goal was to find a new brand identity for K Mart—hopefully one that was favorable.  He knew that Wal-Mart already owned "low price" and Target owned the trendy "cheap chic."  He needed to find something else to own.


His choice?  Smart.   To quote Snyder, "We decided Kmart could own the identity as the smartest [discounter]."


Smart???  If Kmart is so smart, why is it such a loser?  If I'm smart, why am I associating with such a loser?  Winners are smart, losers are dumb.  And right now, Kmart is not a winner.


If I had been in Snyder's shoes, I would have picked something different.  I would have picked the attribute of time.  I would have positioned Kmart as the "fastest" discounter.


Time Fits Who Kmart Is

Why win on time?  First, it takes advantage of the few things Kmart already has going for it.  Kmart's stores tend to be smaller than Wal-Mart's and Target's.  Small stores are faster to shop. 


Kmart's stores tend to be older and located closer to interior communities (whereas Target and Wal-Mart tend to be more likely on the outskirts of town).  This can make Kmart faster to get to—right in the neighborhood.   


Also, customers tend to equate successful stores with busy stores.  Hence, the perception would be that Target and Wal-Mart are so busy that it is hard to just get in and out quickly.  Conversely, Kmart must be faster to shop, since it is probably less crowded.


And best of all, if people have a negative conception of shopping Kmart, let them know that the time spent doing it is very short.  We've shortened the pain as much as possible.  Shift the attention to the experience with the product after purchase, not the shopping.


Time Fits Our Society Trends

People sense more pressures on their time than ever before.  There are more media choices to spend time on.  There is having to care for both your children and your aging parents at the same time.  Mobile devices mean we can never escape work, and so on. 


With more pressure on time, people have to make trade-offs.  Long term trends show that one of those trade-offs is spending less time shopping.  Other activities are getting a higher priority for that time than shopping.  So if that's how people value their time, than why shouldn't Kmart do the same?  Support what people desire by shortening shopping time, so that customers can spend it doing things they would rather do.


Time has become the new scarce commodity.  Kmart becomes the savings store that saves you time.


Time is Hard For Competitors to Refute

Time is the Achilles heal of Wal-Mart.  It takes forever to journey from their massive parking lots to the massive supercenters.  Navigating the inside of a Wal-Mart Supercenter is a very time-consuming chore.  And those checkout lines?  It seems like weeks go by as you stand there in frustration watching your frozen food melt before you.


It is extremely difficult to make significant cuts to the time a customer has to invest when shopping Wal-Mart.  They cannot suddenly make all of their mammoth stores small and convenient.  Their insistent pressure to do whatever it takes to be lowest price runs against spending the money to have fast checkouts.  In other words, Wal-Mart could no longer be who it is if it wanted to outdo Kmart on fast.  And Wal-Mart will not give up its ownership of lowest price to try.


Even if you want to save money, there are limits to how much time you want to waste in doing so.  Many would pay a few pennies more to claim back that time and frustration.  When you put time into the value equation, Wal-Mart's value suddenly doesn't look as strong.


Dollar stores, like Dollar General and Family Dollar, have seen great growth recently.  Part of that has to do with the economy and the fact that prices in these stores are cheap.  But part of it also has to do with time.  Customers realize that they can park right next to the door of a Dollar General and finish the shopping trip in just a few minutes.  Kmart could tap into that as well.


Implications for Kmart

So, if Kmart wants to own time and be known as the "Fastest Discounter" or "Time Savings Store" what must it do? 


First, make sure the checkout lines are the fastest in the business.  This is where people are most aware of time.  Make it where they are most aware of how much better you are at minimizing it.


Second, save people time through highly edited assortments.  Rather than forcing the customer to waste time trying to choose between dozens of types of ketchup to find the best deal, just sell the best deals.  Tell people that the Kmart merchants spend all the time seeking out the best deals so that you don't have to spend the time doing it.


By highly editing the assortments to the best deals, one can put all the one-stop shopping of the mammoth Wal-Mart of Target supercenter into the convenient little Kmart.  The new Kmart would be like three stores in one:  the speedy value food shopping of an Aldi/Save-A-Lot, the speedy value commodity shopping of a Dollar General/Family Dollar, and the speedy value fashion shopping that can be found nowhere else.


Third, save people time by linking the stores and internet shopping tightly together.  For items not in the edited assortment, you can supplement via the internet.  Allow people to pick up items ordered on line in the store, so they don't have to wait a few days for a UPS truck (saving waiting time).


Kmart becomes the king of convenience:  convenient locations, conveniently sized, one-stop-shopping convenience for food, fashion and commodities, and the most convenient checkout process.  Suddenly Kmart is not a loser.


Longer Term Opportunities

Once Kmart sheds the loser image for the time saver image, it opens future opportunities to leverage time.  Fast fashion is a hot trend in apparel retailing.  Firms like H&M and Forever 21 use it to rapidly change the fashion assortment in the store.  This has many benefits.  First, customers are less likely to procrastinate on a purchase, because they know the goods won't be around very long.  Second, customers return more frequently because they want to see the changing assortment of fashion.  Third, by purchasing in small lots, there is less chance of a store being stuck with excess inventory to mark down.


Thus, Kmart could morph fast shopping to include fast fashion when appropriate.


Then, maybe Kmart could add fast to services which are normally slow, or add fast home delivery to save time, or a host of other things.


Wal-Mart can say they save you money so that you live better.  Kmart could say they save you time so enjoy life more.  Now, in my mind that is a smarter Kmart.


Final Thoughts

"Kmart Smart" sounds to me more like an advertising slogan than a positioning statement (and not even a very good one).  But that's what happens when you let Chief Marketing Officers do strategy rather than strategists.


  1. Good points, Gerald. I would imagine if someone at Kmart had the idea to promote Kmart as fast, they wouldn't raise it. The subject of Kmart being fast to shop also points out that the stores are fairly empty of shoppers relative to WalMart. Kmart would prefer to be just as crowded as WalMart, and thus just as slow. If they advertise being fast, and more people come because it's fast, it will slow, and those who came for that reason may stop coming.

    You're right, it's probably the best tactic for them right now, but if it works, it won't necessarily be better in the long run.

  2. Hmm I actually work at Kmart 3116 wilmington nc and I favor the smart slogan "There's smart then there's K-Mart smart". though your points are valid they lack, I mean how can you honestly make K-mart+Fast catchy idk plus you could say "We are the smart choice!".

  3. K Mart Smart may be catchy, but if people don't believe it, it won't matter.