The Kmart corporation actually created the concept of discount trading in America in 1962. This approach was so successful that the company quickly eclipsed Kresge, its parent company, which had existed since 1897 and was one of the largest retail trade companies in the country. Kmart was the absolute leader in innovations. It created a completely new concept of shopping, offered cheap products, and focused its efforts on understanding consumer behavior.
The company developed at a phenomenal pace. In the 1970s, Kmart doubled annual sales and knocked down competitors (including Wal-Mart), opening 250 stores a year. Then they seemed to understand that they were slightly overpowered, and turned back, believing that the incredible power and fame of the brand would be enough for buyers willing to buy goods at a discount, pouring into their stores.
By the 1980s, Wal-Mart still could not keep up with Kmart. They and other competitors constantly modernized their trading equipment and trade halls in order to keep up with modern trends. Kmart continued to doze. In 1990, Wal-Mart came up with a straightforward slogan: We sell at a lower price, completely squeezing Kmart out of their own niche. Wal -Mart outperformed Kmart, becoming the largest retail chain that sells with discounts.
When Kmart finally woke up, it was too late. They rushed about in search of a way to return to business and ended up trying to attract a large clientele. Their plan was to continue to use blue flashing lights and large discounts on some products to lure people into the store and then force them to buy more expensive exclusive items from famous fashion designers.
If Kmart had conducted at least an elementary market research, it would have discovered that for any person in the country the brand meant cheap goods. Buyers looking for exclusive models would not have thought of going to Kmart, and the regular customers of the company could not afford to buy such expensive things.
The company chased buyers from two completely different demographic groups, and the results were predictable. People buy in Kmart stores, because it’s cheap. In the end, Kmart was again re-positioned and Wal-Mart, which offered higher discounts than Kmart, and Target, which entered the market with fashionable clothes at low prices and sold it in stores decorated in a modern design.
The Kmart corporation actually created the concept of discount trading in America in 1962. This approach was so successful that the company quickly eclipsed Kresge, its parent company, which had existed since 1897 and was one of the largest retail trade companies in the country. Kmart was the absolute leader in innovations.