David Biernbaum

TPMA Outlook: Where Did Kmart Go Wrong?

July 22, 2010

FROM RETAILWIRE:
An interesting article in dbusiness, the Detroit business magazine, attempts to explain how Kmart blew the huge lead it had in the discount channel and collapsed into bankruptcy. In hindsight, what were the main reasons that Kmart lost its leadership position in the discount channel?      [more...]

Kmart blew the huge lead it had in the discount channel and collapsed for a number of reasons on many levels but here are my factors in order of importance:

1. Ineffective upper level management; complete with all the right ingredients; corruption, arrogance, lack of vision, and instability with frequent changes.

2. Outworked, outwitted, and outplayed by Walmart, and to a lesser degree, Target.

3. Very poor relationships with vendor partners. Kmart didn't realize it was no longer "Kmart" until it was too late. The arrogance, superiority complex, and rude behavior continued on way too long.

4. Lack of any clear mission, direction, or marketing plan (at least not anything that was obvious, clear, or easy for consumers and vendor partners to understand.)

5. Properties/upkeep that didn't seem to keep up with competition.

6. Poor shelf management and lack of good management over out of stocks, good assortment, the right mix, etc.

Other than that Kmart did a great job and it's hard to understand how it didn't stay in the lead over its competitors!