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Kmart Private-Label Strategy: Will It Succeed?

October 11, 2010
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Kmart’s latest move into  private label makes sense but will be a tough sell nonetheless,   PLBuyer Editorial Director John N. Frank was quoted as saying in a recent Marketing Daily post on Kmart’s introduction of its private label line Smart Sense.

Kmart’s latest move into  private label makes sense but will be a tough sell nonetheless,  PLBuyer Editorial Director John N. Frank was quoted as saying in a recent Marketing Daily post on Kmart’s introduction of its private label line Smart Sense.
 
The discount retailer, part of the Sears Holdings Corp., says Smart Sense will cover everything from snacks and beverages to oral care, paper products, household cleaners and over-the-counter medications. According to the company, the products -- which will eventually number more than 1,200 -- will cost about 20 percent less than their name-brand counterparts.
 
Private-label has been a hot category during the recession, says Frank. "Stores like Target have been doing an incredible job with private label," he says. "It works for them because people are looking for value now."
 
The story notes that Target has marketed its Up and Up brand since May 2009, and Wal-Mart has had its re-launched Great Value brand since March 2009. While Kmart has had some private-label products in its portfolio -- such as Little Ones baby care, Champion Breed pet care and Image Essentials personal care products -- introducing a label across so many different categories is a more coherent strategy.
 
"They're moving from having a private-label brand to having a private-label strategy," Frank says. He adds that creating a separate brand is wise for Kmart, whose name carries a significant amount of baggage. "I don't think there's enough brand equity in there to have it be [Kmart]-branded," he says.
 

In its announcement of the Smart Sense brand, Kmart said it would support the brand through advertising, coupons, merchandising displays, sampling, digital marketing and event marketing. If the company wants the line to succeed, it will have to make a significant marketing investment, Frank says.

"They have to promote it massively," Frank says. "They have to commit to it. They have to say, 'If we're about this, we have to carve out an image.'"

 

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