Kmart has recently announced that they will be holding a record-breaking 41-hour shopping marathon from 6 a.m. Thanksgiving morning to 11 p.m. on Black Friday. This latest extension of the Black Friday craze highlights Kmart’s determination to beat back the memory of the devastating 2011 and 2012 holiday sales—but will Kmart be able to?
Kmart’s falling sales aren’t breaking news. Having filed for bankruptcy in 2003, Kmart was bailed out by billionaire investor Edward Lampert, but over a span of seven years, Kmart lost more than $3.3 billion in market value. Mentioned in the same CBS report, its parent company Sears reacted to these losses by closing 100 to 120 Kmart locations nationwide, but the department store still doesn’t look like it’s recovering significantly in recent years.
Search for a solution
CEO Lampert has attempted to fix the problem by investing heavily into Kmart.com, the online marketplace for the retailer, which has been somewhat a successful strategy so far. Unfortunately, it faces heavy competition from both online shopping giants like Amazon and eBay and other brick-and-mortar retailers like Target and Walmart, who have built up online shopping bases too. All in all, Lampert’s online investment hasn’t impressed customers very much, although it functions well enough.
As of late, Kmart has two newer features: Shop Your Way rewards membership and a partnership with Whynot Leasing (available starting Nov. 22). The payment plan involved with Whynot Leasing is a lease-to-own strategy that puts customers on store credit for big purchases that they can’t pay in full immediately. Gradual payments over time are how they work, but don’t forget about interest in the process. As for the other one, their recent Shop Your Way membership program had its members make up 65% of the company sales during the second quarter of fiscal year 2013, compared to 55% the previous quarter, according to Sears’ reports, although sales numbers overall have continued to decline.
Unfortunately, Lampert’s solutions haven’t addressed the heart of the problem: Kmart’s declining image. Customers still complain about the general disarray of Kmart’s brick-and-mortar chains, with empty shelves and poor customer service. Furthermore, the prices for Kmart items aren’t competitive with market prices, which goes to show the company’s neglect of certain key aspects of consumer satisfaction. Adding salt to the wound, the recent legal settlement in which Kmart agreed to pay $2,550,000 to settle allegations of falsely billed prescriptions to government health insurance programs doesn’t sit well for its image either.
Kmart’s other offers this season
We return to the issue at hand—Kmart’s crazy 41-hour shopping spree. Kmart has opened on Thanksgiving Day before now, in 2011, but never has the retailer kept the shops open all day—nor has any other store. In addition to the extended hours, Kmart is offering in-store orders and free shipping for products not found in stores—an invaluable option for shoppers competing for this season’s hottest products. Then add in its Whynot Leasing options and Shop Your Way customer loyalty points over doorbuster sales items and Kmart may have the edge it needs to have a successful holiday shopping season in 2013.
Kmart has suffered losses and falling sales for the past decade, but this year, Kmart has pioneered the all-day Black Thursday and Black Friday in a final spurt to win shoppers back. If Kmart succeeds, this year may signal the end of its financial downward spiral. Sears may even be able to make use of the sorely-needed new capital to boost up Kmart into an unforgettable shopping experience. Ultimately, though, everything seems to rest on the question: will this year’s holiday fervor, the lease-to-own purchase option, and the membership rewards program be enough to keep Kmart customers coming back for more? We’ll just have to see how Kmart’s Black Friday turns out!
Kmart Image courtesy of Shutterstock.