Ignoring Store Appearance
What one area of Kmart's operations is in greatest need of attention? The cleanliness of its stores. “Disorganized, ” “dingy, ” and “tired” are all terms that have been used to describe the current state of affairs inside most Kmart retail outlets. In some respects, the state of the stores may reflect management's thought process—muddled, stuck, or just plain overwhelmed by Kmart's situation. Most important, the stores' appearance is a big reason shoppers are spending less with the company.
Kmart's reliance on store openings as its means of generating new revenue and sales growth during the 1970s had a major impact on its existing stores—they were left behind. Or, as Buckman, Buckman & Reid financial analyst Ulysses Yannas puts it bluntly, “They looked like pigsties.”
Unfortunately, Kmart's stores are an important aspect of its brand asset, explains Rob Gelphman, president of the marketing communications firm Gelphman Associates. “By letting the inside of the stores decline in appearance, they let one of their key assets deteriorate … uncleanliness will have a lasting and hard-to-remove impact on customers.” Ignoring the appearance of its stores has cost Kmart customers and profits, and has damaged its reputation.