Wednesday, November 17, 2004

Sears -vs- KMart

Back in the day, I worked at Sears. I spent 10 years at the then #1 retailer. Sears was all but untouchable back then, until KMart began to grab market share with their no frills low prices marketing scheme. By the end of my tenure in the late 80's, KMart had surpassed Sears on the retailer list, and it didn't look like they were looking back at anyone.

Sears wandered haplessly, trying various formulas to regain market share and recapture a stingy consumer base. Low prices replaced great service as a deciding factor in the average consumer's mind. Sears was all but helpless in trying to elevate itself back to the elite in the retail market.

And then came Wal*Mart. Sears at least had a well defined niche, in strong brand identification (Craftsman, Kenmore, etc.) and customer service, which allowed it to survive the growth of KMart and the onslaught of WallyWord. KameApart was a sitting duck. Wal*Mart was able to create a shoppers' city with the low prices they craved, and the customer service they missed. It was the beginning of the and for KMart. . . . . or was it?

Sears trudged along over the last few years, while KMart threw up the white flag. KMart filed for bankruptcy protection while closing a large chunk of their stores. I was confident KMart would dig themselves out of the whole, all but starting from scratch, but I never expected what would happen next.

Kmart buying Sears

I had thought maybe Sears would have made a move for KMart, since KMart's value was languishing in penny stock range for awhile, but they kept their strategy to grow from within, and never made a move that could have returned it to the stature they once enjoyed.

So now it is KMart that is going for the jugular. They survived bankruptcy and are looking ahead to create a strong, stable, and vibrant retailer. They'll be smart and keep the stores separate, but what I suspect to see is the brand strength of both to be cross marketed. Craftsmen tools in KMart with Martha Stewart in the Linen department at Sears.

The new corporation is called Sears Holdings, but the management will be all KMart.

It will be interesting to see how this merger evolves, as in most cases, one store pushes it;s name across the awnings of the claimed stores. We'll see how this works out soon enough.


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