Sharper marketing, needed to define an image

DSN Retailing Today, Jan 24, 2005 by Emily Scardino

Paul Guyardo, Kmart's chief marketing officer since last March, has a challenging task on his hands: shaping the image of a company with a particularly uneven brand heritage.

Yes, Kmart is a discount retailer-but Wal-Mart is positioned as the company that "always" has low prices. True, Kmart has its place in the annals of kitschy Americana, but Target has cultivated an image as the "cool" place to shop. As usual, the question is: What is Kmart? Where is the equity in its image, and where is it going-never mind the added twist of the Sears merger.

The core message Guyardo aims to communicate in '05 is that Kmart is a place "where shopping is fun, where shopping is an event, where there is something going on, 'this week, this week only.' "

Guyardo has thus far brought a newly stylish image to Kmart, developed to match its revamped assortments via a host of new marketing initiatives. Advertising focused on a range of both new and pre-existing apparel private labels in fourth quarter 2004 that will continue to be emphasized in 2005.

"We still believe in supporting our proprietary exclusive brands because that is ultimately what creates a point of difference versus our competition. It allows us not to play the price game, and it creates a reason for customers to drive past our competitors and shop with us," said Guyardo. "You can get a national brand anywhere, and then my only differentiator becomes price, and I don't want to have to play on price because that is a no-win situation."

To highlight proprietary new apparel fashion last fall, Guyardo spearheaded an innovative partnership with popular teen channel The WB, featuring advertising and in-store appearances by actors who also wore Kmart apparel on their television shows.

"I think it definitely brought a new customer to our store," said John Goodman, chief apparel and home officer. "As we look back, we also really needed to market to the younger kid as well, and I think we are addressing that."

In addition to teens, Guyardo has experience targeting baby boomers. This marketing guru comes from HSN (formerly Home Shopping Network), where he was evp of television and marketing.

After its initial, student-focused back-to-school marketing blitz, Kmart turned to the misses customer later last fall. Guyardo placed a large number of ad pages in fashion glossies featuring a similar ad campaign highlighting misses private label involving television anchors from "E! News Live." High-profile marketing efforts will continue with a new six-week campaign slated to begin on Aug. 1, 2005, noted Guyardo, though details are under wraps. The new campaign for fiscal 2005 begins Feb. 6.

Previous to Guyardo's tenure at Kmart, the company had successfully developed and advertised a number of brand initiatives, including Joe Boxer, but there was never a cohesive brand message. Going forward, Kmart is vertically organizing its marketing.

"We have a really exciting marketing plan where each week has a different theme, and we really focused on all of our marketing having synergy of communication," said Guyardo. "So whether it is a TV commercial, the cover of the roto, what the in-storefront display area looks like, the credit card promotions--everything plays to the theme of the week."

These themes provide Kmart with an opportunity to move customers throughout the store and to cross-merchandise various categories. Whether it's "The Beach is Back" in May, or "The Look of Love" for Valentine's Day, "each weekly theme is supported by a lead offer," Guyardo said.

Many of these promotions are based on proprietary brands. For example, the week of Feb. 20 is themed "Baby Love" and will promote private labels including Small Wonders and Wonder Kids.

Holiday-based weeks are particularly important, as Kmart has experienced particular success in these areas, especially last Halloween.

"People come to Kmart because they know we have great seasonal merchandise, so we are going to continue to build upon that," said Guyardo.

Whatever surprises lie ahead, the top objective of all marketing remains to promote Kmart's private labels.

"The margin tends to be healthier for proprietary brands, and we're all about driving profitable sales," Guyardo said.