• Andrea Lillo

Kmart brings back Bluelight special

NEW YORK — With 250 days under his belt as ceo of Kmart, Chuck Conaway was here last week to discuss those three little words that so many Americans are familiar with: "Attention, Kmart shoppers."

Kmart's Bluelight special, which for 26 years announced unadvertised sales on certain items in the store with a flashing blue light, has returned to all 2,109 stores — in addition to the website — albeit in an updated, hipper way.

"Everyone has memories about the Bluelight," said Conaway, who, along with executive vp and chief marketing officer Brent Willis, unveiled the new Bluelight at the W Hotel in Union Square.

Calling the Bluelight part of the "American lexicon," Willis said that the it will be "our vehicle to reconnect with the customer," and "drive frequency, loyalty and reward." If each current customer makes one more trip to Kmart a year, he said, that would bring in an additional $2.8 billion.

Conaway used the launch to talk about Kmart's past 250 days, and how it has executed its initiatives to improve operations, develop a customer-centric culture and develop and create "an emotional bond with the customer" with marketing.

"Our objective is to achieve world-class supply chain execution within 730 days," he said, adding that of the 93 "play-to-win" projects Kmart has on its plate, 20 have already been completed.

Back in June, Kmart had eight million outstanding price changes. Today, it has none, he said. It also used 14,952 trailers full of merchandise in June, and today, zero.

"Our supply chain was badly broken," he said. "We were building up merchandise throughout the chain."

Resets have also increased, from 40 percent in June, to more than 80 percent last week, with a goal of 100 percent.

In October, in-stocks were at 79 percent. They were up to 89 percent last week, and Conaway's goal is 92 to 95 percent. "World class is in the low 90s," he said. "It's one of the key metrics."

Kmart will also install its remote maintenance unit so employees can scan a customer's basket before they head to the register, with the hope of no more than three people in a register line.

Customers have also been giving Kmart higher scores on the Super Service Index (SSI), which rates customers' overall shopping experience. With direct feedback from 20 million customers, Conaway said, the SSI was up to 57 percent last week, from 40 percent in October. His goal is 70 percent.

He also said that where Kmart stores overlap its competitors — which he counts as Wal-Mart, Target and Meijer — those units have increased their comp sales by 50 percent. Kmart even beat Wal-Mart's same store sales in February, he added. Kmart has also increased 200 basis points with 70 less stores and is, on average, 400 to 500 basis points higher than its competitors, he said.

As for Kmart's future, Conaway highlighted several goals, including "fixing the flow of goods, the Achilles' heel of Kmart."

The retailer will also cut back on advertising, and instead increase marketing effectiveness through focusing on the customer, as well as improving such areas as in-stocks and pricing.

Conaway also mentioned that Kmart will convert 1,000 stores into Super Kmarts.

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