Renewal creates a more spacious, better stocked housewares dept - Kmart remodeling - includes related article on ready-to-assemble furniture departments - Kmart Power Merchandising

Discount Store News, Feb 21, 1994

The "before and after" photographs used for convincing people that they should try Slim Fast, Rogaine or Revlon could apply to the Kmart housewares department.

A comparison of before renewal and software paints a striking picture of a department as transformed as the people featured in various consumer product ads. However, like the ads, there is the nagging question, "How long will it last?"

The added floor space -- crucial to the renewal process -- has let Kmart do the three things its "before" picture of housewares seemed to need most: create stronger merchandising support for category assortments, expand display space, and improve in-stock position.

Sales and consumer research from both Kmart and Discount Store News suggest that renewal is effective (to one extent or another) and a walk down the memory lane of Kmart's retailing history underscores the facts.

Consider categories within housewares such as cookware, floor care, kitchen appliances, and gadgets. At the very least, renewed stores give each category what it is due in terms of floor space. Regardless of how the selection has changed or remained the same during the past three years, a category like appliances had been relegated to such a small area that it was impossible to give consumers an easy, inviting shopping experience. Associates were forced to cram shelves to get a representative box or two of a particular toaster or coffee maker sku onto the sales floor.

Failure to execute corporate directives at store level long has been pegged as the huge stumbling block to success at Kmart. In housewares, it seems arguable that the problem hinged somewhat less on associate follow-through and somewhat more on the creation of unachievable tasks mandated by headquarters.

"More space is definitely key," said one store manager personally involved in the renewal of his store. "In housewares we grew by about 40% by going higher [with fixturing] and increasing floor space." He confirmed that it was challenging, at best, to keep the small shelf space stocked with the merchandise planogrammed for the appliance area.

"Behind the scenes changes like greater computerization and improved ording accuracy were not something the customer saw during renewal," noted a veteran Kmart store manager, "but they are seeing it in the form of improved in stocks. The fluctuations aren't as great."

Improved ordering works hand-in-hand with greater shelf space, allowing more goods to be on the shelves at any time and reducing the number of times associates must replenish the shelves.

Housewares categories are among the greatest beneficiaries of the renewal at Kmart in terms of shelf space and, in new stores, electrical appliances, specifically, are well received.

It's true that, at a glance, the research conducted for DSN by Leo J. Shapiro & Associates indicates that while the mean rating for the electric appliance department has increased in renewed stores, it is actually rated less favorably today than it was three years ago. However, a look at responses based on the age of the store shows that the newer the store, the more consumers like what they see.

For instance, while the average rating (on a scale of 1 to 9 with "nine" being the highest) for the electrical appliances regardless of store age was 5.33 based on 1993 research, stores that were 1 year old or newer scored 5.79. Units between 2 and 3 years of age scored a lower mean rating of 5.65 while stores 4 to 9 years old dropped to 5.21. The stores that are 15 or older are what seriously impaired the overall ranking; mean figures for the electrical appliance category in the chain's oldest stores is 5.05.

By the same token, stores that had only minor remodels (as opposed to major remodels) were less impressive to consumers in 1993 than in 1990. Consumers who shopped a store with minor remodels were more likely to say they wouldn't shop for electrical appliances in the store in 1993 than in 1990 (19.9% vs. 16.1%, respectively).

Kmart's research, which combines new and renewed stores and comparess responses at these stores to units that are not renewed (and old) would, obviously, show a much bigger difference in consumer acceptance. What it fails to show is whether the favorable response is really due as much to renewed stores as it is to new construction. In other words, does renewal along give stores the kind of sales increases the chain needs for future growth?

Compared with DSN research, the Knart study suggests small kitchen appliances in renewed stores are head and shoulders above the presentation in non-renewed stores (30% vs. 18%). Cookware and utensils were even more successful in renewed stores, Kmart said, with 32% of consumers saying they would shop more for these items at renewed stores, compared with 18% at non-renewed.