Six Illinois Kmart Stores Closing — What Can Retailers Learn From This?
The announcement that six Kmart stores in Illinois are shutting their doors is just more bad news for a struggling company and the hundreds of employees that will feel the effects of this. For other business retailers out there, Kmart’s troubles can be a very important lesson going forward in a time when the way shoppers make decisions is changing rapidly.
Customer Service and Product Availability
Even after joining forces with Sears, Kmart continued to have a bad reputation for not having products that its consumers want readily available. A lot of people also considered many Kmart stores to not provide premier customer service. In a time when there are so many options for consumers, these are two very important things that simply cannot be neglected. For example, Walmart, Kmart’s biggest rival, has been working hard to repair its image for bad customer service. Responding to change in the industry and what your customers are after is essential to staying on top, and Kmart obviously had trouble doing that in its later stages.
Online Shopping On the Rise
The E-commerce era has changed things. It wasn’t but just fifteen or twenty years ago that going to a department store was the only way for people to get the things they needed. Whether it was clothing, electronics, or just day-to-day grocery items, stores only had to compete with other stores. Location was as important as anything. Even in the early days of online shopping, local stores were okay because of long shipping times that made a lot of people still prefer to just run to the store versus using the Internet. That all changed as services like Amazon came on the scene and revolutionized the online shopping scene. Now, two-day shipping is becoming the norm, and every business retailer out there is feeling the strain as they not only have to compete with the store down the road, but online stores across the globe.
Before the rise of Internet commerce, consumers visited multiple stores to view the selection of products and compare prices. Online shopping hasn’t changed that mentality. Everyone wants to get the best deal they can get, but the one major flaw of online shopping is that you don’t have the opportunity to physically examine the product and hold it in your hand. Unfortunately for brick and mortar businesses, this leads to a new kind of window shopping where consumers use the retail store just to check the product out when they really plan to make the purchase online. Of course, this offers nothing for the retailer. They have customers in the store, but they aren’t purchasing anything. Meanwhile, the retailer still has to pay the bills to keep the store operational. This is a major problem for retailers, and there’s no real good way to stop it. After all, you can’t easily differentiate between the customers that are considering buying the product from your store and the ones that are just using your facility to help them make a better decision.
The bottom line on the Kmart closings is that business retailers have to understand the problems they are facing and change with the times. Many retailers are working heavily on the online front to give their businesses a piece of that pie as well. The solution moving forward has to be understanding the threat from online retailers and finding ways to compete not just with the local competitors, but the global ones as well.