Kmart Continuing Downward Spiral

Things seem to be going from bad to worse for Kmart. A few years back, Sears tried to re-energize the failing discount department store but didn’t have much success. A recent announcement out of Alabama says things are getting no better.

According to various media reports, Sears Holdings will shutter four more Alabama Kmart stores as part of a national cost-cutting initiative. The company plans to close 68 Kmart stores total.

The Importance of Customer Service

Things have gotten so bad for Kmart that their woes have made it into a popular stand-up routine in which the comic both lampoons the current conditions in the store and excoriates the chain for being, essentially, clueless when it comes to customer service.

The Kmart demise is a story of one bad brand decision after another. When “cheap” becomes your only defining characteristic, you are immediately vulnerable to anyone with lower overhead and higher buying power.

In one particularly poignant segment of the routine, the comic says what pretty much anyone in his audience is thinking. Don’t keep lowering prices, just trying cleaning your store from time to time.

This sentence, uttered with matter-of-fact certainty, is greeted by unanimous audience acclaim. They, too, have been standing in Kmart and thought this very thing, or some version of it. At least, that’s the takeaway from the reaction to the joke.

The next line is a barb about how employees don’t even bother to pick up clothes some customers dropped on the floor. This, too, is greeted with familiarity. The audience is completely on the same page as the comic. At Kmart, they don’t feel like the employees care, so why should they?

It’s a particularly uncomfortable routine, but it’s a hard truth the leadership at Kmart should hear.

Move with the Times

For the executives and brand managers who have been trying desperately to save the chain over the past decade, that 30-second interaction could have told them exactly what they needed to hear. Why is Kmart dying while other similar stores are still making it work in the Age of Amazon? Because they stepped out of their previous business plan and shifted to something they could own and sell.

Create and Sell the Best Experience

Brands aren’t just selling products or services, they are selling experiences. There’s only so much patience customers have for stores that don’t seem to care about them. Kmart could have moved in that direction, but they chose to hold on to their Blue Light Special mindset, a system Amazon and Walmart and others rendered obsolete years ago. Want a direct example? Look at Target. The chain thrived due to cleaner stores and a friendly, attentive staff. Customers felt better there that they did at other stores, including Kmart. And that’s all you really need to know to understand.

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