Kmart started to decline way furter since it's merger with sears in 2005, how do you prevent Kmart from melting down?
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AHC: Save Kmart
- Thread starter Gigachad3k
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- commerce consumerism kmart retail sears
marathag
Banned
That merger was a scam to make Hedge Fund Guru Eddie Lampert very rich. He got his billions out of the deal, in destroying those two companies.
PoD in 2003, the kidnapping attempt on him goes sour, and he is killed.
They were both already going downhill, Walmart was killing them and Amazon was taking off. About the only thing that would have saved them would be if Sears moved their catalog online in the nineties and later bought out Kmart.
Start sooner maybe. Get Sears online before Amazon, and then when Sears buys Kmart, they will basically be part of a juggernaut.
marathag
Banned
Sears was early online, part of Prodigy back in 2400 bps dialup days in the mid '80s.
They bailed out as they couldn't figure out how to make it profitable, just as the sold off Discover Card, just before that operation became a money maker.
This was as Windows 95 came out, making the getting online process very easy, with fast enough dialup to get real pictures of what you wanted to buy.
At this time, Amazon just sold used books, but Bezos had vision.
Sears had that but it was clouded by cataracts at this point. They couldn't recognize what to do.
No foresight. If only they hung onto either Discover or made the online platform work (IIRC they originally had a shitty platform and tried to develop a good one but the relationship between Sears and the developers went to hell. Instead Amazon got the platform. Now Amazon owns half the world and Discover is the Dr. Pepper of credit cards.)
K-Mart's problems, to me, date way back to when the head office in the '80s and '90s tried to shift focus from K-Mart to other stores the head office acquired during the preceding period, like the Sports Authority. If a renewal of K-Mart took place in the '70s (as it was getting good) to combat its perceived outdated image even then, that would be a big help going forward for the chain.
Part of what did K-Mart in was that many of the stores were poorly kept and outdated. if more money was put in to improve the store's quality in say, the 80s/90s, (this includes not going halfway with the whole "Big Kmart" format) they'd fare a lot better. Oh, and keep Eddie Lampert as far and away as possible. He put K-Mart and Sears together and destroyed them for his own financial gain.
Actually adopt a store identity. Walmart has the reputation of being the cheap “go to” store for your basic needs, while Target has the reputation of being the upscale discount store. Like, what’s exactly special about Kmart? They have no unique identity to give people a reason to shop there. Walmart actually overtook Kmart in the 80s with less stores.
marathag
Banned
K-Mart used to have a Grocery Section, but had removed them a few years before Walmart saw the potential of it, and blew the automotive repair they had before doing the deal with Penske.
K-Marts also moved away from Sporting Goods, aka Guns, while Walmart didn't, and Sam Walton seemed to push
What Middle America Want, you will find it at Walmart, with low low pricing
K-Mart pretty much did everything Walmart later did, but did it poorly, and then tried something else, like with the Little Caesars, back when they they actually sold two pizza for one prize, in space in are near the K-Mart property, while Walmart branched out to many mini-franchises
By the 'late '90s, the stores were getting outdated, and they did a poor job at keeping the merchandise lines Fresh.
Aw yes, the K Cafe, a favorite of the dime store era back when Kmart was known as Kresge’s. Woolworths also had one.
Holy macaroni, I could write a freakin’ book! But I’ll try to be brief:
Full disclosure, I worked for the Big Red K in 90s. I was a receiving guy, then went on to be a manager in several stores out on Long Island.
First, you have to get rid of Antonini, CEO in the ‘90s. He made Kmart embarrassed of the Blue Light, which it NEVER should have been. The “Blue Light Special” was a fantastic way to draw customers as well as get rid of inventory.
Kresge’s business model was full-time employees. Sam Walton used more part time employees (we’ll ignore the horror stories of Walmart forcing employees to work off the clock), which was a lower cost model. With Kresge, you might have only had a retail job, but you had a good retail job with benefits. That’s a great tool to preserve institutional knowledge. Unfortunately, Kmart threw that out several times with programs on ‘this is the new way we’re going to do business!!’ Kmart existed over 30 years at the time, it brick-and-mortal retail hasn’t been figured out by now, the doors really do need to close.
Walmart was gunning for Kmart their entire existence until they passed Kmart. The year before they did, Sears was the number 1 retailer, Kmart was number 2, Walmart was number 3. Kmart at the time was trying to be like Sears (remember, embarrassed of the Blue Light) and doing things like bringing in office furniture and abandoning its position as a discounter. The next year, Walmart was number 1 in the US, Kmart was number 2 and Sears was number 3.
When Walmart had 700 fewer stores than Kmart, they outsold Kmart in Women’s apparel, and apparel was one of Kmart’s strengths, with names like Jaquelin Smith and Kathy Ireland. High profit, the division was headquartered in North Bergen, New Jersey, right across the Hudson River from Manhattan. And like it or not, the fashion capital of North America is New York City. When Kmart moved Apparel Headquarters out of North Bergen to Troy, Michigan, it was a death knell. At the same time, Kmart was trying to cut the number of SKUs (stock keeping units, i.e., different inventory items) in Crafts. Walmart had a large Crafts section and strategically placed it on the opposite side of women’s apparel from their door. Who does crafts? Women, and Walmart had them walk through the ladies apparel department to get to their crafts supplies. Kmart in their new stores was putting their small craft aisle near domestics, towels, bedding, curtains, throw rugs, that kind of stuff.
Studies in the 90s showed customers treated Walmart like a convenience store, shopping on an average of over 6 times a week. Target was a destination store, shopped about twice a week. Kmart was in between, about 2.9 times per week on average. The Big Kmart idea with the pantry for groceries was an attempt (admittedly a poor one) to try make Kmart more frequently shopped.
One of Sam’s great advantages for Wally World was he embraced technology very early. For example, Walmart had no buyer for GE lightbulbs. Walmart’s inventory computer talked directly to GE’s computer and placed orders based on sales. Kmart didn’t exploit that kind of technology until very late in the game, probably too late.
I think a great way for Kmart to stay relevant would have been to do a ‘catalogue’ business in store, later moved to the web. Use computer kiosks in the front of the store for customers to place orders, with contact info and card payment at the kiosk. Later, when the web matures, move this to the internet. But still leverage the store; offer free shipping if the customer picks up the merchandise in store.
Which reminds me, let me provide an example of some flawed Kmart thinking:
I went through management training in a store in a wealthy suburb of Pittsburgh. The Sporting Goods manager in that store would buy 10 or 15 sets of deep sea fishing tackle ever year, and sell through them. So while guy’s wives were in ladies wear looking at clothes, they guys would wonder back to sporting goods and see fishing tackle they could use on vacation trips to Florida or the Outer Banks. Remember, money lives here. The company STOPPED THE SPORTING GOOD MANAGER FROM SELLING the deep sea tackle because “your store is not near an ocean.” So the company would rather inconvenience the customer by forcing an extra stop while on vacation than sell it to them in their home town at a Kmart price.
So my idea to save Kmart, leverage technology, give the customer more than just the brick and mortar store can offer and most importantly, never forget what you are in the retail landscape.
Busy day, my somewhat disjointed thoughts.
Regards,
Full disclosure, I worked for the Big Red K in 90s. I was a receiving guy, then went on to be a manager in several stores out on Long Island.
First, you have to get rid of Antonini, CEO in the ‘90s. He made Kmart embarrassed of the Blue Light, which it NEVER should have been. The “Blue Light Special” was a fantastic way to draw customers as well as get rid of inventory.
Kresge’s business model was full-time employees. Sam Walton used more part time employees (we’ll ignore the horror stories of Walmart forcing employees to work off the clock), which was a lower cost model. With Kresge, you might have only had a retail job, but you had a good retail job with benefits. That’s a great tool to preserve institutional knowledge. Unfortunately, Kmart threw that out several times with programs on ‘this is the new way we’re going to do business!!’ Kmart existed over 30 years at the time, it brick-and-mortal retail hasn’t been figured out by now, the doors really do need to close.
Walmart was gunning for Kmart their entire existence until they passed Kmart. The year before they did, Sears was the number 1 retailer, Kmart was number 2, Walmart was number 3. Kmart at the time was trying to be like Sears (remember, embarrassed of the Blue Light) and doing things like bringing in office furniture and abandoning its position as a discounter. The next year, Walmart was number 1 in the US, Kmart was number 2 and Sears was number 3.
When Walmart had 700 fewer stores than Kmart, they outsold Kmart in Women’s apparel, and apparel was one of Kmart’s strengths, with names like Jaquelin Smith and Kathy Ireland. High profit, the division was headquartered in North Bergen, New Jersey, right across the Hudson River from Manhattan. And like it or not, the fashion capital of North America is New York City. When Kmart moved Apparel Headquarters out of North Bergen to Troy, Michigan, it was a death knell. At the same time, Kmart was trying to cut the number of SKUs (stock keeping units, i.e., different inventory items) in Crafts. Walmart had a large Crafts section and strategically placed it on the opposite side of women’s apparel from their door. Who does crafts? Women, and Walmart had them walk through the ladies apparel department to get to their crafts supplies. Kmart in their new stores was putting their small craft aisle near domestics, towels, bedding, curtains, throw rugs, that kind of stuff.
Studies in the 90s showed customers treated Walmart like a convenience store, shopping on an average of over 6 times a week. Target was a destination store, shopped about twice a week. Kmart was in between, about 2.9 times per week on average. The Big Kmart idea with the pantry for groceries was an attempt (admittedly a poor one) to try make Kmart more frequently shopped.
One of Sam’s great advantages for Wally World was he embraced technology very early. For example, Walmart had no buyer for GE lightbulbs. Walmart’s inventory computer talked directly to GE’s computer and placed orders based on sales. Kmart didn’t exploit that kind of technology until very late in the game, probably too late.
I think a great way for Kmart to stay relevant would have been to do a ‘catalogue’ business in store, later moved to the web. Use computer kiosks in the front of the store for customers to place orders, with contact info and card payment at the kiosk. Later, when the web matures, move this to the internet. But still leverage the store; offer free shipping if the customer picks up the merchandise in store.
Which reminds me, let me provide an example of some flawed Kmart thinking:
I went through management training in a store in a wealthy suburb of Pittsburgh. The Sporting Goods manager in that store would buy 10 or 15 sets of deep sea fishing tackle ever year, and sell through them. So while guy’s wives were in ladies wear looking at clothes, they guys would wonder back to sporting goods and see fishing tackle they could use on vacation trips to Florida or the Outer Banks. Remember, money lives here. The company STOPPED THE SPORTING GOOD MANAGER FROM SELLING the deep sea tackle because “your store is not near an ocean.” So the company would rather inconvenience the customer by forcing an extra stop while on vacation than sell it to them in their home town at a Kmart price.
So my idea to save Kmart, leverage technology, give the customer more than just the brick and mortar store can offer and most importantly, never forget what you are in the retail landscape.
Busy day, my somewhat disjointed thoughts.
Regards,
Discover is more the RC of credit cards.
Given that damn near every bank, credit Union and retail establishment issues Visa and Mastercard, you’re probably more correct than I am.
At least they’re not Faygo or Jones.
marathag
Banned
*thinks* I don't recall K-mart doing much beyond some PC software, while Walmart had a really decent computer section in the early '90s. I honestly don't remember what they did for Consoles in the PS2 Gamecube OG X-Box era
Other vendors I remember, but not them. odd.
Problem is, it's really close profit margin not soon after this for both console and PC
I remember people buying a lot from Kmart, even before the official liquidation, must have been anecdotical them, but kmart used to be popular for games