Shop Talk

Mark Snyder can empathize with Barack Obama, another leader who has taken over in a really tough time.

Except Obama didn't have to worry about Black Friday.

Obama took office just as banks and brokerage houses were imploding, in an economy more challenging than any since FDR's day. Snyder made the jump from travel and hospitality into the chief marketing job at discount retailer Kmart last September, with home creation at an all-time low and consumer confidence in freefall.

“I really respect the way Obama has been able to rally people around change,” says Snyder. “He's taking people back to the potential of America. Joining Kmart, I knew that was going to be my biggest challenge. Getting the internal constituency to rally around the brand, and rebuilding pride about the role we play in people's lives, is essential to getting the brand back on the right track.”

Seven months after Snyder's arrival, nobody's claiming that Kmart is back on the rails. But the chain has avoided breaking, and Snyder thinks it can hold its own against category rivals Walmart and Target.

Kmart's recent history hasn't exactly helped put the 47-year-old brand back on the rails: a Chapter 11 filing in 2002; the closure of about 600 stores and the layoff of about 57,000 employees before re-emerging from bankruptcy the following year; the acquisition of Sears Roebuck in 2004; plans to replace the chain's down-at-heels outlets (now about 1,400 nationwide) with fresher stores placed on hold; and same-store sales declines in 2007 and 2008.

Just the same, Snyder says his previous expertise has equipped him to rebuild confidence in a long-time brand. Prior to joining the company, he spent five years with the Intercontinental Group's Holiday Inn brand family, most recently as senior vice president of global brand management. Before that, he helped define the Embassy Suites chain and plot a new position for the Harrah's brand.

“I knew coming in that Kmart was struggling under some pretty heavy negative perceptions, and that we were going to have to define what Kmart was compared to its competitive set,” says Snyder. “If you don't help people understand what a legacy brand like Kmart is today, they're going to rely on the perceptions they have from 30 or 40 years ago.”

KMART SMART

Through consumer research and focus groups, Snyder and his marketing team arrived at a distillation of what they thought the Kmart brand identity needed to be. The chain needed to find room between Walmart's strong value-priced play and Target's cheap chic. Snyder and his team thought they saw a niche with “ Kmart smart,” an appeal aimed at shoppers who want value but are savvy enough to get those savings with style.

“Walmart's got the reputation as the low-price leader, always,” he says. “Target was the first mass-merchant to step up and claim to be the trendiest. We decided Kmart could own the identity as the smartest.”

In product selection, that means being sure always to offer “unexpected quality” for low prices, according to Snyder. For example, during the holidays, the chain offered 100% cashmere sweaters for $40 dollars, and 800-thread-count sheets for discount prices.

“You just won't find 100% cashmere at discount stores, and definitely not at a Kmart price,” he says. “And at most mass merchants, high thread count means a high price too.”

Kmart also has access to unique brands and product lines. The company has long-running relationships with the apparel and home furnishing lines associated with actress Jaclyn Smith and domestic diva Martha Stewart; built the Joe Boxer brand in men's underwear; and established a mom following for its Route 66 store brand in kids' clothes. The merger with Sears also brought Craftsman tools, Kenmore appliances and DieHard batteries into the Kmart pipeline, and about 300 of the stores now sell those marquee brands.

The brand will continue its emphasis on offering quality apparel at affordable prices. Last May, that effort led to Kmart's online “Style Showoff Contest” to find a real-life fashion ambassador. More recently, the chain has taken its shoe business in-house, producing a line of low-priced basketball shoes created by New York Knicks forward Al Harrington, as well as numerous women's styles.

Finally, Kmart is going to lengths to bulk up merchandise with no-cost add-ons: everything from throwing in a Disney princess teapot with a purchase of a “Little Mermaid” video, to a free custom belt with jeans from Kmart's in-house designers.

“Never underestimate the power of free,” Snyder says.

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