Last Call, Kmart Shoppers?

Sears and Kmart struggle to market against strong competition and weak economy.

July 8, 2011, 5:42 PM

Sept. 16, 2011— -- I was raised in a solid, middle-class home. That means that at different stages of my life the Sears catalog and the Kmart blue light special were as familiar to me as our family's golden retriever, Lacey. My early consumer training manual was the Sears catalog. I would wear out the toy section of the book, gazing longingly at things I knew we couldn't afford. I would promise myself someday I would have everything I wanted like that tent that slept five or the 7-piece drum-set. (I must admit now that I'm an adult both do languish in my garage after getting very little use.)

Few things about our prolonged recession have been as jarring to me as the news that Kmart (along with Sears -- the companies merged in 2004), once the nation's leading discounter is in the ring on one knee very likely soon to be down for the count; battered by the economy and stronger opponents, powerful uber-discounter Walmart and its stylish discounter counterpart Target.

In a recent poll conducted by America's Research Group, 25 percent of respondents said they had shopped at a Target store in the past 30 days, 69 percent said they had been to a Walmart while only 5.5 percent had shopped in a Kmart. With 1,300 Kmart stores and 3,900 Sears stores in North America, Sears Holdings Corp. is a formidable retailer that still is the nation's largest provider of home services with more than 12 million service calls a year, many to fix one of its popular appliance lines. As a marketer, I have more than a passing interest in exploring the role image has played in the demise of Sears and Kmart.

Much has been written about the man at the top, billionaire investor Eddie Lampert, who created Sears holdings by merging the companies in late 2004. He is, by all accounts, a serial cost-cutter and by many accounts, difficult to work for and not willing to pay top-dollar for executive talent. Under Lambert the facilities have aged and staff has had low-moral. While Sears and Kmart slowed to a crawl losing market share in appliances and apparel, Home Depot, Lowes, Kohls,Walmart and Target have all seen gains.

From an advertising perspective, Kmart and Sears have lacked focus, strong branding, personality and excitement. Last holiday season Kmart tried a shift to a stronger focus on diversity. This year, Kmart has run a campaign with the tagline "Money can't buy style" and Sears has recently hire the hottest advertising agency on the planet McGarry Bowen (who won the Burger King business as well earlier this year). You get the sense the company can't figure out how to communicate with its customers in this odd time in our history. In this age of wide-reach and over-communication, affordable luxury is seemingly more appealing than cheap, but over-priced.

So now what? It is a tall order for advertising to get consumers excited about a company analysts are predicting may not survive another year. With no additional investment in facilities or upgrade in its offerings or change in its pricing strategy; there is no news to celebrate. Interestingly enough, the bright spot last week when Sears Holding reported numbers was the news that Sears would accelerate the "externalization" of its brands. Sears Holding will allow some of its strongest brands, Craftsman, Kenmore and Die-hard to be sold in stores not owned by Sears Holding like Costco and Ace Hardware. This strategy is risky however and might serve only to hasten the demise of Sears and Kmart and force the hand of the company to focus on what Wall Street Analysts believe is the biggest asset anyway, the real estate.

I'm always humbled when I'm forced to admit that advertising and marketing can't solve every problem. But when you pull back from the problem it seems like a company with two strong brand names like Kmart and Sears, that together house a solid half-dozen consumer goods brands that are among the strongest in the world like Crafstman, Kenmore and Die-Hard should be able to figure out how to market to consumers who put a premium on value and proven performance. But then again ask Oldsmobile and Circuit City. Last one out shut off the blue Light.

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

Larry Woodard is a director on the Advertising Week board and chairman of the American Association of Advertising Agencies' New York Council.

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