The Martha miracle takes root in L&G and blossoms in baby - Martha Stewart Everyday brand at Kmart

Discount Store News, March 22, 1999 by Mike Duff

The Martha Stewart Everyday brand commands a unique stature among mass market brands. Her huge success in home fashion at Km art has translated into continued product expansion and has created a need to cultivate very carefully the Martha Stewart Everyday brand. And while other major vendors such as VF Corp. and Pepsi have strong names and significant influence--in addition to many private label and exclusive brand suppliers that have helped shape departments and store images--none has had as much input and profile as MSE at Kmart.

"There's only one Martha," said Floyd Hall, Kmart's chairman, president and ceo. Hall estimated that MSE could grow to represent as much as 4% to 5% of Kmart's gross revenues. Those figures, based on Hall's predictions, represent $1.5 billion to $2 billion in annual sales.

To offer some perspective, Bed Bath & Beyond passed the billion-dollar sales barrier during the past year. Already, MSE is the biggest single program in Kmart and will become even more significant.

However, Hall sees MSE as more than simply a successful initiative. The program also stands as a symbol of change at Kmart and as a bellwether and standard. "It helped open our eyes to how well we were offering the customers what they want," Hall told DSN.

The success of MSE also has helped Kmart recast its identity. "We can best achieve differentiation through further extension of Martha Stewart," Hall added.

In fact, Kmart execs said they have only begun to explore the potential of the Martha Stewart brand. With the recent rollout of patio sets, Martha has broached the world of outdoor furniture. Within the context of Kmart, she is probably best known for soft home, at least thus far. Externally, though, Martha Stewart first made a name for herself with cookbooks, and she has since translated that success into a rare stature in the kitchen--and just about every other room in the house.

Rarely will retailers admit admiring a program developed by a rival, but no one disputes Kmart's success with Martha Stewart--nor do they contend that the program has reached its capacity.

Kmart recognizes that while it has plenty of untapped opportunity with Martha Stewart, it has to keep the program focused on home and garden, where Martha is maven. Within those categories, however, Kmart has the opportunity to significantly expand the scope of its Martha products.

Andy Giancamilli, president and gmm of U.S. Kmart Stores, told DSN that even when the Martha Stewart brand is evident in all the segments where it fits, the job of building the brand will hardly be finished.

"We've done domestics, bedroom and outdoor living furniture, but we're still not in horticulture--and another natural will be kitchen," he said. Martha Stewart baby, a domestics layette program, is due out in September. "Once we've extended her to kitchen, that's it. Then we build," Giancamilli added.

The building process, as envisioned by Kmart, should be open ended.

"I think it's best to say we're just at the beginning and have a lot of product development, marketing and advertising to accomplish," said Steve Ryman, Kmart's divisional vice president and brand director Martha Stewart Everyday. "You haven't seen anything but the tip of the iceberg. We have just started to see the effects of Martha Stewart at Kmart."

The new garden collection, debuted last month in the Southeast, includes an assortment of patio furniture and accessories such as gardening gloves, hoses, flower pots and outdoor furniture cushions, as well as tools and a limited assortment of bedding plants. It also includes plenty of opportunity for expansion.

Sharon Patrick, president and coo of Martha Stewart Living Omnimedia, noted that the rollout of garden has followed a pattern that has been evident as the Kmart program has advanced. The first season's rollout is designed as a teaser to build interest in what is to come. The rollout extends for two more seasons, the second including the heart of the program and the third serving to fill it out and make it fully functional.

"It's a three-season rollout that gives us the time we want to do what we want," Patrick said. "Once again, we're doing it our way, so that in the end consumers will have all the tools and materials they need to garden in the Martha Stewart style."

Within garden, Kmart thus far has launched outdoor furniture and about 20 ft. of plants with tools and related accessories. This is considered a preview of the entire program, which will include live plants.

"We've gone from home to outdoor to garden," Patrick said. "First, you get to enjoy the great outdoors on your beautiful Martha Stewart patio furniture and think of ways you can improve it with our coordinated products."

The garden program, as with everything else Martha Stewart does, will be developed with function and color symmetry as its central propositions. That kind of intricate planning has been critical to the Martha Stewart Everyday rollout. As Patrick noted, the introduction of garden has been planned almost like a stroll around the home, from house to patio to garden. Removed to the next level, the overall rollout has taken a similar tack.