Blue Light Special

When I was growing up in the 1970's, I had relatives that worked at KMART.

I thought KMART was the best. It seems like I spent a lot of time there. I would go with my Mom, spend time in the toy aisle, eat hot dog on a grilled bun and get a milk shake. Even though you had to pay a dime to go to the bathroom, I still had a great deal of fun there.

As I grew up, KMART wasn't as fun anymore, but I still liked getting sports stuff from there. Baseballs, tennis shoes - I'd spend my time in the sports deparment.

Well, as I struck out on my own KMART lost me. The stores in my area are dingy, the products aren't managed well, the service - what service?

Switch gears, let's talk about Sears. My Mom would take me there for Toughskin jeans (they had knee patches that made them last longer). I didn't really like those jeans, but I didn't have much choice. I wanted a good pair of Wranglers.

My relationship with Sears followed the same line as KMART. It decreased over time, except for paint. Sears owns me for paint.

Something has changed though.

This past year, I have shopped at Sears more. It's interesting why they have earned more of my business. It has to do with my wife and kids. We did 80% of our back to school shopping for our kids clothes at Sears in the Land's End Department. Good sale, descent product, we bought.

And then, my wife went back to Sears to get some clothes for the fall at the Land's End department.

And then, I meandered over into a clearance sale and bought some shoes (two pair) at a really good price, and guess what - Sears is getting back into our household.

Now they have paint, kids clothes, my wife's clothes and maybe even some clothing from me.

That's a huge change. Secondly, they kept us out of Kohls.

Now, I know this is getting long, but here's what I would do if I was running the operation to combine Sears and KMART:

• leverage the combined distribution system of both businesses to bring about tremendous savings in delivery costs
• maintain and/or widen the demographic diversity of the target audiences for Kmart and Sears, target different customers with different messages for each businesses. This brings about stability to the overall company by diversifying it's customer base.
• don't try to make the Brands something they are not. I can only feel so cool when I walk into either of these stores. Sorry - it's the truth.
• combine the media purchasing power of the two Brands to gain added reach with your message
• add a level of quality to the products. If I buy a shirt, wash it three times and it's ratty - I'm not coming back.

Summary: the combination of the businesses is a huge opportunity.

Now you are number three. The problem is that number three is a terrible position to be in, it's the least profitable and hardest to maintain. Get costs in line behind the scenes. Give me quality at a good price. Don't try to fool me. I'm almost a loyal customer again. Good luck.