The Kmart Corporation is an American big-box department store chain based in Hoffman Estates, Illinois. There were more than 2,000 stores in the US alone. It came in second to Walmart in the 90s. But what happened to Kmart today?
From more than 2,000 stores opened in the US in the early nineties, there are only four Kmarts left in the United States. Their sudden boom and downfall were caused by a lack of brand identity and solid marketing plans.
How Did Kmart Start?
Kmart was first opened in 1897 through the partnership of Sebastian S. Kresge, a traveling hardware salesman, and John G. McCrory, owner of eight general merchandise stores on the east side of the US. Kmart was originally known as S.S. Kresge stores, opening five-and-ten-cent stores in Memphis, Tennessee, and Detroit.
By 1907, Kresge became the sole owner of the stores, operating in eight cities. The company steadily expanded through world war I and two. Kresge tried maintaining the price of its products to ten cents, but the inflation brought about by the wars drove the prices higher.
In 1962, the company entered the large-scale discount market with the program designed by its president, Harry B. Cunningham. Along with building its first Kmart store outside Detroit, the company also introduced the Blue Light Special marketing strategy. There were surprise deals that only ran about 15 minutes, highlighting discounted items.
The corporate name was changed to Kmart in 1977, and its aggressive growth, opening an average of 85 stores annually. Kmart’s popularity steadily rose in the nineties and into the early 2000s, with Martha Stewart becoming its public face for entertainment and lifestyle products.
By the early 2000s, the company operated more than 2,200 stores in US territories. Despite its success, Kmart filed for bankruptcy in 2002. Its intense competition, Walmart, brought it about. Kmart tried making a comeback in 2005 through the acquisition of Sears, rebranding itself to Sears Holdings Corporation. (Source: Britannica)
What Caused Kmart’s Decline?
Though the company seemed to be prosperous, Kmart and Sears sales continued to decline. In 2009, Stewart accused the company of allowing her line of products to drop. She then withdrew her partnership with the company. Around the same time, many of the Kmart stores began to close down. (Source: Britannica)
According to business analysts, one of the critical reasons the company declined was its lack of real strategy. Kmart was purchasing many stores to expand further, and they were trying to be good at everything, not identifying what brand or strategy would work for them. Kmart focused on selling a wide variety of brands at discounted rates, but that’s pretty much it.
Connected to this strategy is that Kmart focused on keeping its prices low, sacrificing the quality of its products. The Martha Stewart line helped the company earn billions of dollars but eventually discontinued it due to its overall costs.
Kmart failed to realize was, tapping into the rural market. The company focused on opening stores in the suburbs. While Walmart took the rural market, allowing it to overtake Kmart despite having lesser stores.
Kmart was uninterested in adapting to modern times and hopping on eCommerce trends like their competition. Instead, they chose to focus on a more traditional approach to shopping. (Source: Alabrava)