The founder of Walmart, Sam Walton, once expressed envy at
how a discount retailer called Kmart was so successful. Fast forward to 2018
and there are only 360 Kmarts left, which are eating Walmart’s dust. What
happened? Well, our story begins in 1962, when Sebastian Spering Kresge opened
his very first Kmart. In 1899, he had the brilliant idea of selling goods for
either a nickel or a dime (how I wish that could still be today.) and, by the
1960s realized that people in the US were shifting to the suburban areas of
cities and, decided to set up his first discount store, which he called Kmart
in 1962.
In 1965, Kmart pioneered a revolutionary marketing tactic
that gave customers a symbolic value to the company. When goods had to be sold
fast, a flashing blue light would be placed at that particular department and
an announcement would be heard, “Attention Kmart Shoppers, for the next 5
minutes(specific product) will be discounted from $70 to $15”(for example). So
iconic was the Blue Light Special that the phrase “Attention Kmart Shoppers”
made it into movies such as “Beetlejuice” in 1988.
People felt an emotional
attachment and community when they heard that phrase. Community bonding which
sadly Kmart did not capitalize on in the Social Media age.
Classic line from the memorable 1988 film, Rain Man, about Kmart's decline. Coincidentally, 1988 was when the movie "Beetlejuice" with the iconic "Attention Kmart Shoppers" line came out.
But then, Walmart which was started just four months after
Kmart, found ways to make their deliveries efficient, enabling them to offer
low prices. If Walmart offered low prices, then what was Kmart?
Kmart has thus lost its value to consumers. It tried
partnering with Yahoo in the late 90s for their website but, that did not go
well. Kmart has occasionally made a buzz on the Youtube community by
reintroducing the blue light special in 2015 (Kmart strangely took that away in
1991) and, having creative light blue shirt with pop culture references but, it
may be too late. In October 2018, Kmart filed for bankruptcy protection.
One way I can see them bouncing back is if they start using
an infomediary business model, where they could pay Facebook to give them
information about potential customers. Another way is Kmart doing a viral
marketing campaign where all the stores can have the blue light special at the
same time. The video can be posted on Facebook and Youtube, rather than
Instagram or Twitter because, the most number of people are leaving Instagram
and Twitter. Posting a viral video on Youtube would also help get media
richness, which simply means that a video about a blue light special will be
easier to understand than, a text about the Blue Light Special. Bouncing back is not impossible, as shown by this Kmart that was forced to close due to a flood. It is now one of the best Kmarts after it re opened.
But, what are your thoughts? Comment below with other
digital marketing suggestions to let me know how you think the internet age can
save a fallen Blue Light. Note that Kmart in Australia and New Zealand are no longer affiliated to American Kmart and, are doing extremely well.
I believe that Kmart should go back to its roots by creating a sense of community and nostalgia to its shoppers and rewarding them with unique service to regular shoppers. So that younger generations can have a positive impression and older generations can relate to Kmart
ReplyDeleteThat's interesting. Yeah, I am sure a rewards program might do them good. At least the Iconic blue light was brought back in 2015.
DeleteYes I agree, Kmart should make use of the blue light gimick on the digital platform. Especially since alot of their potential consumers could be young millennials who haven't heard of Kmart.
ReplyDeleteRecently, Shoppe had a promotion during black friday where friends could help slash prices for products, thereby raising brand awareness and getting a lot of users on to the platform. Kmart could do something similar like that, have a digital campaign with some sort of social aspect to it. For example, maybe the more friends you share the Kmart link, the higher the chance that item that you like would go under blue light. Thus if enough people like something expensive like the new Nintendo Switch, the higher the chance it would go on sale. From there Kmart can advertise other products to the customers.
That seems interesting. Yes, someone had me like something from Shoppe before so that it would go on discount.
DeleteI am curious as to why the bluelight tactic was stopped and why their partnership with yahoo had failed?
ReplyDeleteWell for Yahoo, the partnership failed because a certain search engine giant took over the market. Blue light was stopped in 1991, when the company wanted to rebrand itself, not realizing how powerful the phrase "Attention Kmart Shoppers" had become.
DeleteThis is a rather interesting article. Kmart should have thought of potential issues with increase in competition so that they could have been proactive instead of reactive.
ReplyDeleteYeah. Their response to compete with Walmart in 1999 was to open more Kmarts with borrowed money. Big mistake
DeleteKmart could have utilised Blue Light Special gimmick on social media platforms where a lot of their potential customers aka younger generations thrive. A video, a photo, anything helps to capture their attention as long as it's eye-catching!
ReplyDeleteYeah. Kmart has only done that on their app but, how many people are likely to use their app rather than social media?
DeleteIf you were the manager of Kmart, what would you do to revamp it? How can you apply the learning points of this case to your own business?
ReplyDeleteI would, renovate the declining stores, find a niche for Kmart and, make sure tv commercials are run to promote the "New Kmart". I would constantly think of new ways and technology to improve my business. Would you believe Kmart still uses cash registers with a big screen which display green text? It's like a blast from the past.
ReplyDeleteKmart reeks of complacency, like so many other firms who refuse to move with the times, yet somehow still stick to their roots. I couldn't help but notice your reply to a comment where you stated that you would "make sure TV commercials are run to promote a New Kmart". Kmart should have recognised AND utilised its relationship and resonance to its community and consumer base and engaged them using their floor space, technology, as well as to constantly reach out to new target-markets. Since Kmart still uses old cash registers which is deemed, "a blast from the past", they can leverage on that while overhauling their current "backwards" system:
ReplyDelete1) Have a small section of the store be like a "mini-museum", where they can display such old technology, POP displays etc, and with it, engage with their customers by having staff on the ground interact with store visitors on how such old technology works etc.
2) Have their old jingles/commercials air in the store at that corner
3) Run Social media campaigns, like photo competitions(i.e.#blastfromthepast), with that corner.
This could be a starting point, especially in collaborating with its community or history lovers of all ages while making it educational and fun for all ages.
Very clever Mel. I would love to see a history and education museum in Kmart. That would be so cool and, would help to re attract people to Kmart.
Delete