Kmart

Once the nation's largest retailer, Kmart was an early leader in the discount merchandising game. An offshoot of the venerable S. S. Kresge variety store chain, Kmart came to epitomize the familiar, everyday shopping experience of the late twentieth century: a massive parking lot on the edge of town and the large boxlike, single story structure with a bewildering selection of reasonably priced goods. The spontaneous in-store advertising gimmick of a moveable cart with its revolving beacon has made "blue light special" part of American society's shared language. Often the object of ridicule and disparaging comments (the New York Times characterized the store as "a caricature of strip mall culture"), it nevertheless played host to the consumer purchasing power of some 70 million customers. Along with Wal-Mart and Target, Kmart changed the way Americans buy what they need.

The very first Kmart opened in a suburb outside of Detroit (Garden City, Michigan) in 1962, which happened to be a watershed year for retailing in this country, as it also witnessed openings for the first Target and the first Wal-Mart. While many observers were captivated by the charismatic personality of the late Sam Walton and focused on the phenomenal growth of his Wal-Mart empire, it should be remembered that Kmart was the first of the discount chains to

[Image not available for copyright reasons]

aspire to a national presence and the first to successfully challenge the department store giants for retail supremacy. It was also the first retail firm to accurately cater to the new suburban lifestyle by offering the type and variety of consumer items that were increasingly in demand. By 1970 the company had built over 400 stores and was the undisputed discount store sales leader with more than a billion dollars in sales annually. During the next two decades Kmart grew enormously, and by 1989 the firm had surpassed Sears to become the nation's leading retailer. It turned out to be but a brief stint at the top, however, for the following year Wal-Mart caught up and took over the lead position, which it retained throughout the 1990s. Many analysts felt that it was simply a matter of age and beauty, as most Kmarts were both older and smaller than the more recently built Wal-Marts. Different locality strategies may have played a role also, with Kmart avoiding the smaller towns where its fierce competitor seemed to thrive best. Looking for an edge, the Kmart corporation took an ill-advised leap into diversification, acquiring several specialty outlets, such as Builders Square and Walden Books, which did not perform as expected. During the late 1990s, under the watchful eye of former Target executive Floyd Hall, Kmart embarked on an aggressive program of store renewal.

Acting to rectify public perception of poorly stocked, dark, and dirty stores, Kmart executives launched a modernization program to remodel and replace aging facilities with brighter, wider aisles and more sophisticated displays and replicated the computerized warehousing and inventory techniques pioneered by arch rival Wal-Mart. Adopting a strategy of "lifestyle merchandising," the company sought to capitalize on celebrity sponsorship of select collections of specialty clothing and housewares, contracting with Kathy Ireland, Jaclyn Smith, and Martha Stewart to push a more upscale product line. In something of a radical departure in terms of both market and store design, the company opened a four-level outlet in the heart of Manhattan. With innovative on-line internet shopping matched with realtime returns to any of its 2,000 store locations across the country, the company poised itself to capture a larger market share of the discount retail world. While the store was long regarded as simply a cheap and convenient place to buy necessities (a larger version of its ancestral five-and-dime), Kmart management strove to change that image during the late 1990s. As the firm's own mission statement audaciously professed, "Kmart is a symbol to Americans—the place which helps them attain the quality of life guaranteed in the American dream." Barring any radical shifts in popular culture, it is likely the familiar loudspeaker announcement "Attention Kmart Shoppers!" may yet ring in the ears of American shoppers for years to come.

—Robert Kuhlken