Kmart unveils bold plan to double sales amid fierce competition from online sellers Temu and Shein
Kmart is transforming its store layout and online offering as it looks to win over younger shoppers in the battle with online rivals like Temu and Shein.
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The new boss of Kmart is looking to compete head on with surging online rivals including Temu, Shein and Amazon, unveiling ambitious plans to win over younger shoppers and double revenue to $20bn.
Kmart’s popular home brand Anko is already a big winner with families on a budget, and the retail giant has begun trialling a new store layout that puts clothing and beauty at the front of stores to boost sales.
It’s part of a push to win over more Gen Z and Gen Alpha shoppers, who are most likely to purchase goods online rather than in a traditional bricks and mortar retail store.
In a presentation to investors at parent company Wesfarmers’ strategy day last week, Kmart Group managing director Aleks Spaseska explained how Kmart and sister company Target were attracting shoppers increasingly seeking value buys amid the cost of living crisis.
“What we can see is that Kmart is really a brand for everyone, so we’ve got very good levels of engagement across all customer demographics and across all levels, and they’re spending with us, and we’re seeing growth across all of those customer cohorts,” she told The Australian.
“The other thing I would say is, I think once customers come and they discover the product offer, the extent that they have additional disposable income in the future, there’s lots of different ways to spend that, and that’s what we’re seeing.”
While Kmart Group is enjoying strong growth – sales jumped 2 per cent to a record $6.2bn in the six months to December – other discount retailers like Big W are doing it tough amid fierce competition with online rivals including Amazon and eBay, and Chinese marketplaces Temu and Shein.
But not resting on its laurels, Kmart Group, under Ms Spaseska’s leadership, is targeting $20bn in annual turnover – almost double its current sales.
Kmart is looking to expand its wildly popular Anko home brand, including with stand-alone stores in global markets with “high growth in middle-income households”, starting with the Philippines ahead of a potential roll-out across South East Asia.
Closer to home, it’s completely reshaping the retail experience for its millions of Aussie customers.
A new store format targeting younger shoppers is being trialled, with more prominent displays of its fashion and beauty ranges.
Larger products such as bikes and car seats will be moved off the shop floor to storage areas, and will remain available through online ordering and in-store collection, freeing up space for higher-demand products like beauty, youth clothing and electronics.
The first test site was Kmart’s Mount Gravatt store in Brisbane, refurbished late last year. According to Ms Spaseska, it’s already showing promising signs, with stronger sales, particularly in apparel categories.
Four more stores will be refurbished in line with the new layout next month, ahead of a potential roll out across the national store network.
Kmart is also shaking up its digital offering with plans to launch a new online marketplace to showcase in a highly interactive way all the offerings that the discount merchant has. It comes after the retailer doubled the number of monthly active users on its Kmart app over the past year to more than 1.3 million.
Ms Spaseska acknowledges that her ambitions for the company are “really big, bold” but believes Kmart can win the battle for bargain hunting shoppers.
“I don’t underestimate the really critical role that we play in customer’s lives. We make a lot of things accessible to families that wouldn’t otherwise be accessible,” she told The Australian last week.
“I feel very fortunate too and very privileged, actually, to be in a position to be able to take such an amazing asset and take it into the next phase.”
Originally published as Kmart unveils bold plan to double sales amid fierce competition from online sellers Temu and Shein
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