- April 10, 2023
- Posted by: Gopal Krishna
- Categories:
Numerous organisations are working on break-through innovations keeping customer as ‘focal point’ to their business. Customer Experience (Cx) is a culmination of many aspects of the business coming together coherently to make tangible positive impact to customers and the business. In this article, let’s look at how K-Mart Australia has been driving Cx and therefore, their growth.
K-Mart is a house-hold departmental store in Australia, US and other countries. It offers products across key categories like Home & Entertainment, Kids & Toys, Women, Men, sports, Gifts & Party, Catalogue, Ideas & Inspiration.
K-Mart core strategy to provide ‘low cost’ and ‘value class’ Cx;
· Everyday products, better quality, lower prices for families.
· Fashionable, on-trend merchandise for wider customer segments.
· A great place to shop and a simple business to run.
Customers in Australia may have experienced, in the last few years, K-Mart has consciously moved away from ‘Discount Store’ to ‘Everyday Low Prices (EDLP)’. It’s very interesting to learn how K-Mart has gone about transforming itself from near bankruptcy to profitability in a few years by fiercely focusing on Cx under stellar leadership of Guy Russo.
Let’s look at what to expect when we walk into K-Mart stores;
In Store Experience
· Layout – Cheerful, colourful, bright, clean wide aisles stores. Easy to navigate inducing impulse purchasing.
· Product Categories – cleared the clutter from 50,000 to around 12,000 product lines
· Own Brands – massive increase in own/home brands by replacing private brands
· Options & Prices – Big on varieties, sizes. Low on prices.
· Quality & Price – Fine balanced between quality and price with low to mid-range prices
Marketing & Branding
K-Mart changed their marketing, positioning and advertising from generic to specific targeting women, especially mothers and kids. It created campaigns that reinforce it’s fresh stores, trendy fashion and lower prices.
Pricing – Everyday Low-pricing Model
· Earlier K-Mart used to have ‘sales seasons’ and now it has ‘everyday low-pricing’ model
· Customers’ Trust – by moving away from seasonal pricing to consistent low prices, K-Mart won the trust and confidence of its customers.
· Increased Volumes & Sales – by adopting everyday consistent pricing and in certain categories periodic reduction in pricing owing to volumes, K-Mart effectively sold millions of more products than it used to in the past.
Fixed Supply Chain & Logistics
K-Mart focused on driving higher volumes from a lower product lines by introducing lean methodology with processes like pick and pack, with reduced carton sizes and lowered shipping costs.
K-Mart adopted ‘direct sourcing model’ by consolidating suppliers and directly procuring from them, avoiding the middle-men. It’s been able to match the customers’ buying preferences with right sourcing and low prices. K-Mart built stronger relationships with key manufacturers/supplies from major sourcing countries like China, India, Indonesia and Bangladesh.
Digital/Social Media Effect
Social Media is one of the best things that happened to K-Mart. It’s core customer segment – Mothers – started becoming brand ambassadors or fans in thousands promoting K-Mart product lines especially home-wares and fashion lines. Enthusiastic Mothers started posting rather flaunting pictures of their K-Mart products across social media – Facebook, Instagram and others. This resulted in a ‘K-Mart Community’ with viral and multiplier effect for it’s brand. What’s even more interesting, K-Mart does not directly involve in this social media buzz.
This is very encouraging to see a business completely turned-around by fiercely focusing on it’s target customers – Mothers & Kids. In order to create a consistent and superior Cx, K-Mart embarked on foundational changes across different functions.
Thank you for reading. If you have visited K-Mart, I welcome you to share your experience, feedback and comments.
Regards,
Kris
WINsights Solutions
