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Friday, September 9, 2011

Layaway Competition

Apparently Kmart and Sears garnered enough attention from their Layaway program that now Wal-Mart is reviving their layaway program for this year's holiday season, and has already gotten widespread positive attention from its shopper base, many of whom SHLD bragged that Kmart had lured over with its layaway program. So now that these shoppers are going back to Wal-Mart, which is also experimenting with various size store formats (think Wal-Mart Express), will this holiday season mark another dismal sales record for Kmart? In the past decade, Kmart has slipped from being close to Target in sales to a distant fourth (or even lower, depending on which stores one counts in the category) in its category of sales.

Furthermore, SHLD has decided to sell Craftsman at Costco, further diluting any semblance of brand leverage that Sears still retains in its oftentimes shoddy stores. First, Craftsman sold at Kmart - well, maybe that's OK because it is still the same company; then at ACE/TruValue Hardware stores, now Costco...
So what is the future of SHLD? The company since the merger has been quite disappointing, with some poorly-executed cheap ideas (Sears Essentials anyone?) that may have had the potential to succeed given more investment, but alas, everything in the world is impermanent, with even former #1 in sales retailers (actually, both Sears and Kmart were tops in the categories in the past) possibly turning into mere memories.

2 comments:

  1. walmart has various restrections such as no clothes order must be over $15.00

    ReplyDelete
  2. If anything, I think Wal-Mart's "reintroduction" of lay-a-way has generated MORE interest at Kmart! Why? Wal-Mart has too many restrictions on their layaways... No clothes, no sporting goods, no housewares, nothing outside of a couple departments AND with various restrictions. Unhappy customers from Wal-Mart have been flocking back to Kmart. I've also noticed that many people who haven't even used (or heard of) layaway for that matter are calling and visiting us, wondering what our layaway program is like. Thanks to Wal-Mart, Kmart has gotten a lot of "side publicity."

    As for the future of SHC... Corporate has some decisions to make regarding Sears. They need to quit closing Kmarts and started closing under-performing Sears. They should also consider ridding Sears of fashions and soft-goods and transitioning to electronics, appliances, and auto goods.

    ReplyDelete

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