I originally posted this on MyKmart.com, a public forum where customers and employees can talk about Kmart and suggest ideas for improvement, and talk about their general experiences. I’m reposting it on my blog because Kmart still continues to be my favorite place to shop, but they are a classic example of how a negative brand image can really hurt a company – even after the initial reason for the bad image has past. You can read the original thread here.
It’s good to see so many people getting involved and telling their stories about Kmart and Sears. I’d like to give my input using my marketing background a bit to respond to the whole Sears vs. Kmart thing.
Brand name and brand image play an important part in consumer choices. Kenmore and Diehard are two brand names that most consumers have a positive image of and therefore they tend to be the leaders in their categories. As a company, many people also have a positive image of Sears. Almost everyone grew up with Sears and they have a reputation of still being customer-focused (granted, they did slip for about 3 years but I think they have gotten back on track).
On the other hand Kmart’s #1 problem is not what they are doing today. I think that Kmart is doing everything extremely well from what I can see (I’m a customer, not an employee) and I’ve been very impressed at the turnaround I’ve seen in the stores and in the way they advertise.
Kmart’s problem is an image problem that started back in the late 1980s and continues to this day. So many people have a negative image of Kmart because of the sad shape the stores got into during the late 80s and 90s. People think of Kmart as dirty, unorganized and below Wal-Mart in terms of quality (I’m not making this up, numerous marketing textbooks and studies have shown this). The bankruptcy of Kmart seriously hurt them even further, and until the merger with Sears most stores had not seen a remodel since the early 90s (if that).
Today Kmart is turning its image around, but one of the most difficult things to do in marketing is to take a brand that has a negative image and turn it into a positive one. From the publicly available data out there, we know more people are returning to Kmart stores and we know that the quality of merchandise has been improving. It’s now up to Kmart to get those people to become loyal shoppers, and to continue the momentum they built.
I’ve posted it before, and I’ll post it again, but I fully expect Kmart to shutter more stores in the next few years. There are some stores that just will not be profitable no matter what they do. They are in a bad location or they are in such bad shape the cost of trying to modernize them is just prohibitive.
I think in 3-5 years we might see the opening of new Kmart’s — but it won’t be a massive expansion. Select locations, maybe 2-5 a year max; and that might be a generous number.
Kmart had a long rise to the top (in 1986 Kmart was the #1 shopping destination in America) and subsequently their fall to the bottom was hard and painful. However, I still have faith in the Kmart brand, the people behind Kmart and in Sears Holdings. I grew up with both Sears and Kmart, and to this day every appliance in our house says Kenmore and every tool in the garage says Craftsman. I haven’t given up on them yet, and don’t intend to give up on them anytime soon.