Photo: By daysofthundr46 on Flickr
As Walmart and Target have prospered, once-mighty Kmart is now fighting for its life. The brand has been a train wreck since its heyday decades ago. Things were looking up for Kmart when Sears bought the brand, but it has still remained in the gutter with its ever increasing list of store closings.
How did it all happen?
EJ Schultz at AdAge has written up a great explanation. Here are some highlights:
- Kmart has a lack of clear positioning. Walmart promises the lowest prices, no matter what. Target promises “cheap chic” and a better customer experience as an alternative. Kmart’s promise? Nobody knows — it no longer has any meaning. Customers aren’t excited to go to Kmart.
- Its acquisition spree from 20 years ago is still hurting it. Back in the 1980s and 1990s. Kmart bought up a bunch of chains like Waldenbooks, Borders and OfficeMax. After that, Kmart lost focus, and allowed Walmart to steamroll it.
- Its stores are dated, and haven’t gotten the upgrades or revamped designs that it needs to compete.
At this point, something drastic has to be done to save Kmart — simple cost-cutting isn’t nearly enough. There’s no place in the world for the brand as it is.
As Margaret Bogenrief at ACM Partners wrote a couple months ago, it has to have a coherent pricing-and-product strategy (to find its spot between Walmart and Target), expand its management and totally revamp its supply chain. If not, private equity may be the only answer for parent Sears.
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