Kmart was once a household name, the go-to place for affordable goods. However, with competition from online retailers and discount supermarkets, Kmart has had to make some changes to stay relevant. In this article, we will unpack Kmart’s business strategy and take a comprehensive look at how they have managed to stay afloat.
Product Range: The first change that Kmart made was to reinvent its product range. They wanted to focus on what was selling well in store and also look at how they could improve existing products. The new strategy saw Kmart increasing the range of products it offers, with a focus on home and clothing ranges. Kmart introduced a range of clothes for children, such as licensed merchandise from Disney, and also introduced a range of minimalist home decor, which proved to be incredibly popular.
Pricing: Kmart’s pricing strategy has also undergone significant changes in recent years. The company has shifted from being a discount retailer to offering ‘everyday low prices.’ Using a pricing strategy of this nature, the company is able to entice customers by offering competitive prices all year round and avoiding price wars with competitors. This is partly achieved through cost reduction measures and procurement efficiencies. Additionally, the process of markdowns is less painful, and often unnecessary. The company’s pricing strategy has paid off, with Kmart seeing a steady increase in sales.
Store Experience: Another key aspect of Kmart’s strategy is its in-store experience. With the rise of online retailers, physical stores have to be experiential. Many stores have revamped their interiors, making them brighter, airier, and more visually appealing. Kmart launched its ‘K Hub’ concept, which focuses on creating an experiential environment for shoppers. The K hub houses an array of features, including a gelato bar, a homewares display section and an interactive children’s play area, making it a haven for families who want to shop together.
Marketing: Kmart’s marketing strategy is also worth mentioning. The brand has leveraged social media to increase its reach and interact with consumers. They have made it a point to engage with customers on Facebook and Instagram, sharing photos of their products in real-life settings. Additionally, Kmart has launched its ‘Living’ campaign, which emphasizes how products can be used in real-life situations. Their advertising approach focuses on the everyday of customer’s lives rather than trying too sell a lifestyle.
In conclusion, Kmart’s business strategy has been successful in keeping the company relevant amidst the rapidly changing retail landscape. It has been able to achieve this through its focus on product range, pricing, in-store experience, and marketing. Going forward, Kmart will need to continue developing its product range, investing in new technologies, optimizing its supply chain, and making use of sophisticated analytical tools to drive improved decision making. Nonetheless, the brand has a good foundation to build on, and successfully executed goals to increase its bottom line.
