A Tale of Two Stores
September 2, 2011,
By David Gill
While their parent company, Sears Holdings, struggles to gain a stronger financial position, Sears and Kmart are looking to push their home departments to the forefront by emphasizing their particular brands.
Instituting the strategies for the home area in both stores is the responsibility of Amy Parker, chief marketing officer of home for Sears Holdings. Sears and Kmart are two different types of stores, but "we want to try across both formats to serve the broadest swath of consumers," Parker said in an exclusive interview with HFN.
That being said, there are obviously differences in how Parker approaches the marketing functions in both stores. "Kmart as a mass merchant has a very different price point it's trying to hit," she said. "There are also more frequency of visits from its customers. Thus staples are more important for Kmart to offer than for Sears." In Parker's definition, staples in the home area include items such as sheets and towels "and everyday things our shoppers are shopping for."
Sears' strengths lie in home hardlines, kitchenware, dinnerware, ready-to-assemble furniture and mattresses. "It has to do with the strong position it has in hardlines in general," Parker said. "This doesn't mean that soft-home staples are unimportant in Sears."
Brands have become the crucial common thread to the marketing of the home area in both stores. Parker identified Kenmore, Cannon and Country Living, "which brings the fashion element," as critical brands to both Sears and Kmart. Then there are brands such as Ty Pennington in Sears and Jaclyn Smith at Kmart, which "are not solely fashion nor solely everyday," Parker said. Colormate at Sears and Essential Home at Kmart are examples of brands for everyday staples in both locations.
Just as crucial to the future success of each store's home department are the incoming brands--Gordon Ramsay Everyday, under an agreement with the celebrity chef and restaurateur, at Kmart; and Sandra by Sandra Lee, from an agreement with the Food Network television star and cookbook author, in both stores. The Gordon Ramsay Everyday collection will include cookware, dinnerware, cooking utensils and small electrics. Sandra by Sandra Lee will encompass cookware, utensils, gadgets, bakeware, small electrics and tabletop.
The Gordon Ramsay Everyday line, which Parker described as "something with a design element in each product," will arrive in Kmart this fall. Sandra by Sandra Lee will make its first appearance in spring 2012.
The shoppers to which Sears and Kmart are gearing all of these products have changed in their habits, Parker said. "What's interesting to us is that our customers are becoming very open to shopping at whatever channel that will meet her particular need for what she's shopping for."
In other words, Sears and Kmart may very well be serving the same consumer demographics in some cases. "Today, the customer has such easy and incredible access to both stores and online that she can be very specific as to what she's looking for and open to shopping at whatever store where she can find it," Parker said.
This makes the job of positioning Sears and Kmart vis-a-vis its competitors that much harder. "You have to compete very hard every day for every customer," Parker said. "She has so many options. She is willing to be loyal to an extent, but it's a savvy loyalty."
Yet another challenge for the Sears and Kmart home departments is, of course, the economy--which has hurt brick and mortar retailers in many channels and which could yet rear its ugly head throughout the rest of this year and into 2012.
The difficulties presented by shoppers' economic circumstances have remained constant since the Great Recession began almost four years ago. "We haven't seen huge changes in shopping patterns in home," Parker said. "The customer is still looking for even greater value, and it doesn't mean just the lowest prices. She is looking for quality cues as well."
For staple items such as pillows, sheets and towels, and for fashion-oriented categories, "quality cues" translates into aspects such as thread count and embellishments. The shopper "is pretty demanding in what she is looking for," Parker said.
The way Sears and Kmart try to meet this challenge is to constantly underscore the value in the products both stores offer. "I think it's important to show (the shopper) every day that we have great prices, very competitive prices, and for the money, you are going to get more value," Parker said. "This will also play into our brands...the idea that the brand sharpens this perception of quality at great value."
Brands thus have taken a central role in the Sears and Kmart home merchandising, and will do so going forward. "We see ourselves continuing to bring in brands and focusing on existing brands where we see significant opportunities for growth," Parker said.
New brands, whatever they might be, will also satisfy the need that Sears, Kmart and indeed all retailers have, which is to keep their merchandise fresh and on point. "There is an ever greater demand from consumers that their retail outlets and channels provide newness and freshness," Parker said. "Our challenge in that regard is to become nimbler and faster in bringing in new products, and bring what consumers want faster."