What Kmart’s Troubles Mean To Me

I absolutely love Target. I respect the hell out of Wal-Mart. And boy, do I feel really sorry for Kmart.

Should we write off Kmart as a power retailer? Does their Jan. 22 Chapter 11 filing mean that Wal-Mart (and, to a lesser extent, Target) has won?

The arguments for throwing in the towel and moving to Bentonville are compelling. Kmart ceo Chuck Conaway admitted that, “Our prices were too high, our stores were too dirty, our lines were too long, and we were out of stock a lot.” Throwing more logs on the fire, Kmart has suffered from poor sales, lack of cash, limited access to financial markets, a plummeting stock price, disgruntled suppliers, increased competition, an economic recession, and schizophrenic marketing efforts.

One might even come to the conclusion that Kmart executives shot themselves in the foot, then quickly reloaded. This is evidenced by their marketing plan. They brought in Martha Stewart in 1987 and drove that business up, but later took their foot off the accelerator in favor of the Big K rollout. Then, BlueLight Specials were reintroduced, sort of, because they moved to EDLP and “BlueLight Always” with some specials — but cut back on their circulars and mass advertising.

Last fall, Zipatoni talked to Kmart shoppers about the BlueLight concept — specials and always. There was a lot of confusion. Consumers liked the idea of BlueLight Specials as surprise values. They didn’t know what “always” meant, so the whole proposition was undermined.

Kmart and Mr. Conaway are trying to reinvigorate the internal culture through a program called “Play To Win” when, in fact, it could be concluded that their key program should be called “Play with Consumers’ Heads.”

But I’m not ready to throw in the towel (which, by the way, is a 200-thread count Martha Stewart dish towel with a nice flower pattern). Far from it. If I may be so bold, I’d like to submit an idea for Mr. Conaway to consider. It goes like this:

First, form a Kmart brand advisory board led by Martha herself, with other members to include Kathy Ireland, Michael Eisner, and Bert and Ernie. These folks know branding, consumers, and how to communicate persuasively. And they all have a vested interest in Kmart’s success. Nothing goes to consumers without this group giving the green light.

Second, uninvite all manufacturers’ salespeople from calling. From now on, Kmart doesn’t want any more selling or buying. No more pitches. Instead, invite all manufacturers’ brand marketers to come call on Kmart’s marketers.

Retail Nirvana

In short, make Kmart a haven for brand marketing. You must show up with a customized integrated marketing plan surrounding your products. Kmart will become the place where brand managers actually market their features and benefits directly to consumers.

This could be a radical change to the way manufacturers and retailers do business. Yes, Procter & Gamble and Wal-Mart pioneered “partnership” in the ‘80’s. And great improvements like category management, EDI, and other bonding practices are now commonplace. But change has come slowly to marketing departments within manufacturers and retailers. Brand marketers want to market around retailers (that’s euphemistically called direct-to-consumer) or, if they’re weak, they become hostages. And retailers have shunned brand marketing with clean store policies and the like.

The concept isn’t marketing through retailers anymore, but marketing with retailers. No more buying and selling transactionally. How is the marketer’s proposition going to help the retailer drive overall store traffic and increase overall ring? This is true partnership.

Oh, and a fourth thing: To make this work, you must relocate. Big Beaver Road can’t compete with Sam Walton Boulevard. Marketers need to be enticed out of HQ, so pick someplace nice.

Jim Holbrook is president of Zipatoni. He can be found at [email protected] or browsing in the pet sections at Wal-Mart, Target, PetsMart, and Kmart.