Kmart's better off in the blue than in the red - Blue Light Special marketing campaign - Brief Article

Every savvy retailer has a device to draw in-store traffic. Wal-Mart uses EDLP and price rollbacks. Target uses power brands like Starbucks and Mossimo. And now Kmart has brought back the Blue Light Special, a promotional tool made famous in the mid-60s.

Take it or leave it, the Blue Light Special is what Kmart is betting on to bring the mojo back to Motown. But if you choose to leave it, remember one thing: This time around there's much more to Blue Light than just a stick and a siren.

This new and improved Blue Light Special has the potential to serve multiple promotional purposes: It can be an added bonus to vendors jockeying for prime floor space; it can facilitate the clearance of overstocked merchandise; and it can provide a venue for highlighting new merchandising concepts. In short, it provides the retailer with a platform--literally and figuratively--to showcase its goods.

Furthermore, if effectively implemented, the Blue Light Special could transcend its role as a promotional tool by giving Kmart the traffic it needs to carry out Conaway's master plan of converting occasional light shoppers into regular repeat shoppers. This is a pivotal element to the ceo's ultimate goal of getting one more store visit per current shopper and thus adding $2.7 billion to the bottom line.

Sound far-fetched? Coming from the mouth of anyone but Conaway, the answer would probably be yes. But in the brief 250-day period since taking over as top dog in Troy, Mich., Conaway has proven himself as an achiever, even making believers out of some of the stiffest suits on The Street.

The statistics speak for themselves.

* Trailers. By June 2000, Kmart's Band-Aid approach to inefficient backroom management had gotten so out of control the company had amassed more than 14,950 tractor trailers in and around its store lots. Today there are none.

* In-stocks. Since October 2000, when in-stocks were hovering around 79%, Conaway has managed an increase of nine percentage points--putting Kmart well on its way to the ultimate goal of having 92% to 95% in-stocks.

* Super Service Index (SSI). Kmart has been in need of a customer service gut check for a long time, and now it's getting one. Through Conaway's bullish approach to SSI, real-time customer service measurements have risen to 57% overall, up from 40% last fall.

* Resets. Recognizing that poor backroom management is "the greatest inconvenience and the surest way to run customers out," Conaway has eradicated the isolated incidents of dismal 40% resets and created a company average of 85%--with the eventual goal of nothing short of 98%.

With all of these operating initiatives under Conaway's belt, the success of Blue Light would seem a foregone conclusion. But before any conclusions can be drawn about the fate of this campaign, Kmart has several high hurdles to clear--not least of which is finding enough natural-born leaders among its associates to orchestrate "The Blue Light Cheer" every hour on the hour!

When all is said and done, though, Blue Light represents much more than a simple marketing campaign. In truth, it's the introduction of an entirely new operating philosophy by an entirely new team of executives.

As Conaway put it when he addressed the media on the occasion of the Blue Light launch, "[This is] a monster structural as well as cultural transformation." And if this holds true, the new Blue Light Special could very well be the long-awaited missing piece to Kmart's decade-old turnaround puzzle.

COPYRIGHT 2001 Lebhar-Friedman, Inc.
COPYRIGHT 2001 Gale Group