Source : THE AGE NEWS
Kmart has begun trialling a new layout that brings clothing and beauty to the front of the store, in an effort to maximise sales and lure Gen Z and Gen Alpha shoppers into becoming lifelong customers.
The popular retailer’s new managing director, Aleks Spaseska, outlined a vision to further develop its women’s, men’s and youth apparel ranges and beauty products, ramp up electronics, toys and collectables for “kidults”, and deepen social media engagement, as part of a broader goal to double the business in under 10 years.
“The biggest difference you’ll notice is in the apparel and beauty offer in the store,” Spaseska said.
Kmart is changing its store format to lure younger customers in and get shoppers to spend more.
“If you go into women’s apparel today, you’ll see we mostly sell all the tops together, the bottoms together, the dresses together. If you think about the way our merchants put the ranges together, it’s a brand-new outfit,” she said.
“When you walk the store in the new format, there’s much more co-ordination through women’s apparel, which allows customers to be much more inspired and helps with outfit building … We’ve also brought beauty to the front of the store as well.”
Brisbane’s Mount Gravatt store was refurbished last year to be the first to try out this format, which is already yielding results as customers put more items in their baskets. Four more stores are in the pipeline for next month, and if successful, all Kmart stores will eventually be refurbished.
“Those results have been stronger sales, particularly in apparel, and really pleasingly, we’re seeing customers because of changes to the flow of the store, shop much more,” Spaseska said.
To make more room for clothing, some bigger, bulkier items like car seats and bikes will be removed from the shop floor to the back of the store, where customers can request and buy an item through a digital “select and collect” screen.
Kmart will also lean harder into social media and online engagement, which is already high, with several Facebook groups and users on TikTok showcasing their affordable purchases. The retailer will focus on expanding its range of cleaning items, household accessories and appliances such as hair curlers.
The longer-term target is to double the size of Kmart’s business, which Spaseska described as a “really big, bold” goal to achieve in “more than five [years], less than 10”.
Kmart raked in $11.1 billion in sales and profits of nearly $960 million in the 2024 financial year and is the powerhouse of parent company Wesfarmers, a $94 billion giant, which also owns Bunnings, Officeworks, Target, Priceline and more.
New Kmart managing director Aleks Spaseska speaks during a Wesfarmers strategy briefing day.Credit: Louise Kennerley
“One of the things I’m always conscious to say is, it’s not a forecast, it’s not a business plan. It is an aspiration,” said the new managing director.
“It galvanises the team, first of all, around what we are aspiring to. The second thing it does, I think, is it provides a focal point for how big do the moves we make need to be. ”
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In-house brand Anko is the driving force behind Kmart’s success, representing 85 per cent of the chain’s overall sales. Products are developed by in-house designers and buyers and produced in Kmart’s factories in Bangladesh, Indonesia and China.
“Our unique model, from product design through to sourcing through to store, means we can take those growing categories, those trending products, and we can bring them to market at a fraction of the cost of what anyone can, so we’re making those products accessible to a much larger customer base than ever before, and that’s really where we see the opportunity,” Spaseska said.
However, some Australian designers have accused Kmart of copying their product, such as kitchen gadget design firm Dreamfarm, based in Brisbane, which created a folding citrus juicer that won Oprah Winfrey’s approval and was named one of Time magazine’s best inventions in 2023. Temu sold a replica of the item, but later removed it.
Spaseska said Kmart invested significantly in its design and buying team.
“Global trends are global trends that are picked up by our suppliers, picked up by retailers globally. We’re constantly led by what a consumer is looking for, and how can we interpret those things with a unique Kmart slant and produce the unique products that we do at the price points that we do.
“It’s something we invest in really materially.”
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