Kmart CMO on Why Retailers Are Seeing Signs of Hope

Layaway was a big hit with consumers when the economy tanked, and it still is. Kmart, which is part of Sears Holding Corp., has observed that consumers use the option—which lets shoppers gradually pay for items they want to purchase—year round. The shift reflects America's increasing focus on value, as well as careful, planned spending, said Kmart chief marketing officer Mark Snyder. But value isn't the only focus for Kmart. Using digital and social media, the retailer is prompting teens and younger consumers to shop at its stores. Selena Gomez is launching an exclusive line of teen clothing in Kmart in July, and Jones Apparel Group’s GLO jeans and accessories recently hit stores. In an interview with Brandweek, Snyder, who hails from Holiday Inn, discussed layaway, teen apparel, and what's new on the marketing front. Excerpts from that conversation are below. Brandweek: You have a lot going on in terms of new product and marketing news for Kmart. Give us a sneak peek of what’s to come.Mark Snyder: [The Kmart-exclusive brand] Jaclyn Smith—that’s really the big news this year. We’re celebrating her 25th anniversary with Kmart. That’s a celebrity-designed brand we’ve had for 25 years and I think she wins the award for that. Her collection this spring is about fresh energy, revolution, not to mention the style sense she has. We’ve got an expanded swimwear line from her and also one for Joe Boxer, which is exclusive to Kmart as well. Also, Top Light, a well-known apparel brand for men, has a lot of new, exciting news as well.BW: What are some recent changes Kmart’s been rolling out in-store?MS: One thing that just took place is the “Everyday Great Price” [strategy] we rolled out in January across all of our apparel categories, [particularly] on things that are [part of her] everyday, basic [clothing needs]. For example, with layering tees, we know she needs something that is high quality and at an everyday low price, something she can buy and not worry about going on sale tomorrow. [Consumers] can find that same value offer on men and kids’ clothing. That’s a key indicator in terms of us understanding our customers and what is important to them in the shopping experience. We’re also continuing to work with our stores to create a clutter-free environment, [where the aisles] are easy to navigate and where price point and brand are apparent.BW: Selena Gomez is launching an exclusive line in Kmart, and Jones Apparel Group’s GLO line recently hit stores. Why the big focus on apparel? Is it a big category for Kmart?MS: It’s a huge category for Kmart and, we believe, a business opportunity in terms of creating growth for the brand. The recession gave us the opportunity to represent to the customer why Kmart is relevant in terms of its offerings. So, for us to be able to go out at this point with an apparel story that really focuses on quality and value at the price point that we deliver is the right place for us to be. So, expect more from us in terms of great apparel news.BW: Layaway was a big hit with consumers in 2008. Are you reviving that strategy this year? Is there a new twist? How successful was it?MS: Our experience with our consumer shows that layaway has moved from being something that is of seasonal value and relevance to something she uses year round to plan for her family’s needs and expenses. So, she’s using it not just during the holidays, but during the springtime for patio furniture, grills, outdoor toys, swimming pools and things of that nature. And even during back-to-school, when you get into the July timeframe. She doesn’t really want to think about it at that point in time, but she is all about planning. So, from a planning perspective, she can go into the store in July, get the good stuff before it’s gone, put it into layaway, then, school starts again, she’s got it, paid for it and she’s ready to go. Layaway is truly an option we’ve given our customers that they’ve appreciated and that they’ve learned to use year-round.BW: What’s your outlook for the retail industry this year? Is it improving? And, what are you seeing with respect to consumer shopping and purchasing behaviors? Are they still as penny pinched and focused on price and value?MS: Price is still very important. The quality and value it delivers for that price is even more important than it’s ever been . . . If you think about the way shopping behaviors were before the recession—purchases were very impulsive driven, credit card focused and self-gratifying—she is much more planful now. She is enjoying shopping, but she is also fully recognizing—from a planning standpoint—the ability to have these options and understand the spectrum of what’s available is a very important piece of her shopping experience. Everyone is starting to see signs of hope in terms of shopping returning. I also think she is at a point where she really has to replace some things she might have held off on replacing, so home items or a new backpack for her child she got last year. Those things are now getting to a level where they need to be replaced, but she’s been smart, she’s saved money and she’s using layaway and that’s allowing her to get what her family needs when they need it.BW: Sister brand Sears has been quite active on the social media front lately What’s Kmart doing in this space? Any notable or highly successful campaigns you can talk about?MS: Social media marketing is, we believe, a really effective way to engage in dialogue with a younger consumer for whom Kmart might not be on their radar screen. It allows us to reach people who didn’t grow up with Kmart, [and for whom] the brand hasn’t been part of their consideration set. [These are people who are] . . . much more discerning with traditional media messages, but if you can engage them in an online community that allows them to have a conversation with other people, [with topics] they are interested in and if you can do that in a very authentic and honest way, they’re all for that. Kmartdesign.com is a great example of that. If you log on, you’ll see a collection of films created by a documentary filmmaker that goes behind the scenes with 250 designers in Soho [and Chicago] who create the private label fashion brand for Kmart. It does a great job towards establishing what Kmart’s point of view is. You need a point of difference in terms of apparel in the mass market. So that’s a much more effective way for us to get a message across in terms of engagement with a younger consumer instead of putting another apparel message on TV.BW: What about media spending? Are you spending more on traditional or digital media and how do you see the two coming together?MS: TV and print play a big role, but the challenge, really, is to continue to connect with that core customer who has been with Kmart for a long time—and [who connects better] through traditional media—while investing in social and less traditional media to attract a younger, new consumer. [The trick is not to] outspend, but to outsmart our competitors by figuring out what is the right mix to keep the balance of [both] . . . [We’re] investing in digital and social media to allow us to understand more fully what role a mass merchandiser can play in younger consumers’ lives and what’s the right way to reach them. [So, our investment in] social and digital media is definitely increasing, but traditional media like TV and print still play a role.BW: Kmart was certainly active on the marketing front last year. Which would you say was the most interesting or successful?MS: Two things: The first is our layaway message and how we’ve been able to extend that beyond a seasonable component of the Kmart offer to a year-round value proposition that allows her to not be dependent on credit and still get everything her family needs. But what I also really love is the results we saw from the clearance program we launched in January. January is one of those months when everyone is shouting “Clearance!” So, what could we do to make that different? We launched [that] and we tied it in with our “Shop Your Way” rewards program, where [the shopper] got triple rewards on anything that was marked as on “clearance” during the run of that promotion. The results we got from that were really positive. It was an amazing value for her and it was another proof point to the organization about how important differentiation is when everyone else is saying the same thing.

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Kmart CMO on Why Retailers Are Seeing Signs of Hope

Elaine Wong

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