And in this fourth-quarter retail season, we thought it would be helpful to take a closer look at what really distinguishes these competitors because they provide valuable insight into the key components of a winning corporate strategy. We believe that all successful companies — Walmart and Target included — know precisely how they provide value for customers. They then select a set of products and services that best leverage those unique capabilities and optimally suit their chosen way to play.
Focus for us, therefore, is not about picking just one market , but rather about choosing one coherent way of competing. Kmart has been a revolving door for senior management, having seen three CEOs in the past seven years, each with their own strategy for turning the company around.
This management burn and churn and changing direction not only confuses customers and employees, but rocks the cultural foundation on which a successful company is built. It also gives them the ability to close down their unprofitable stores, vacating their leases and other obligations; Kmart announced early last month that it intends to close of their current 2,store base. Will Kmart make it long term? I'm confident that they will successfully exit from under bankruptcy protection within months, albeit as a significantly smaller company.
I also believe that their operating cost structure will be much lower, primarily due to losing the lease liability and the closing of unprofitable stores. But this alone will not ensure Kmart's long-term success. Until we see a detailed reorganization plan that addresses fixing their core positioning issue, identifying a customer niche and a reason for being that differentiates them from Wal-Mart and Target, as well as the implementation of improved operating efficiencies and processes, this bankruptcy protection only buys them a little more time.
For the sake of our industry, I hope they make the right long-term decisions. Many of the challenges that Kmart has faced could impact your own businesses if you let them.
Understanding your customers and their changing needs; positioning your programs to meet their needs and expectations; investing in the technology that provides efficiency and efficacy; and communicating a clear and consistent message to employees and customers alike will help you stay growing and profitable.
Study the reasons for Kmart's demise and learn from them — you'll be the better for it! April The many-headed monster Store Locations. Lessons Many of the challenges that Kmart has faced could impact your own businesses if you let them. He can be reached by phone at or E-mail at [email protected]. Current Issue. Culture , Variety Info. One of the major missteps that Kmart did was to fail in having a clear positioning in the industry.
The continued expansion which looked more about showing financial muscle as opposed to strategic development is what led to its status being in question. This is what also led to a loss in profitability and a lack of direction in the long run. Kmart would have positioned itself as a giant and fought off competition from the likes of Target, Walmart and the likes only if its strategic development plan would have been on point.
The change of the message from branding to sales also meant that the focus shifted leaving the retailer vulnerable in terms of the competition taking advantage of a vacuum.
If there is one thing that platforms like runrex. Initially Kmart targeted the low income Hispanic consumers but when the focus shifted during the uncharted expansion, other retailers including Dollar Store took advantage and became the major competitor that expanded rapidly. Ultimately, in-store shopping experience is key and if it is diminishing with every passing day, it means no shopper will want to visit the respective stores.
Kmart failed to adapt to the digital age and instead stuck to the out-of-style mode of shopping I turn failing to listen to the changing tastes and habits of the consumer. This meant there was no brand strategy which also translated to there being a failure to provide value unlike with other brands which is a major fault condemned by business experts and authoritative platforms like runrex. It experimented with surprise Blue Light Special discounts beginning in It designed a robust retail-employee training program.
Other customer-friendly adoptions were layaway and store credit cards, Nisch said. But by , Walmart had surpassed Kmart as the second-largest retailer in the United States behind Sears. In the decade prior, Kmart had shifted its focus to purchasing other chains such as Builders Square, Borders books and Sports Authority — all of which have gone defunct. The investments left Kmart stores "flailing.
They were at a point where they could never catch up again. Kmart's profitability and sales peaked in and its store count hit 2, in , but competition was growing with Walmart, Target and soon internet shopping.
The company filed for Chapter 11 bankruptcy in , emerging a year later with ESL as the majority owner. While the company made some efforts to reinvigorate stores, revive Blue Light Specials and encourage Sears' Shop Your Way loyalty program, stores continued to shutter.
Profitable quarters were rare and it sold off assets such as Craftsman tools. The original Garden City Kmart store closed in The company filed for Chapter 11 bankruptcy in October with Lampert's ESL as the only bidder looking to buy the company. Kmart is one of the saddest retail stories.
Sears has stores in Livonia and Westland Shopping Center. The Sears location in Novi's Twelve Oaks Mall is closing , joining numerous other big-box vacancies across the country.
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