It's the end of an era for Kmart: The retailer is closing its last full-scale store in the mainland United States in October. The location is in Bridgehampton, New York. At its peak, Kmart had more than 2,000 stores in the U.S, and it's hung on since filing for bankruptcy more than 20 years ago.
When Kmart opened in the '60s, it was known for its Blue Light Special. A blue light would go off, announcing a limited deal in the store.
"It would get your heart racing," said Pete Fader, a marketing professor at Wharton. "It was, 'OK, what's it going to be?'"
Kmart was so respected that Wharton had a special teaching position named after it, Fader said. "It's something that seems fairly laughable — almost insulting — now."
That's because the business model Kmart created became its downfall. Target and Walmart took over, making it hard for Kmart to stand out. The retailer has been closing stores since filing for bankruptcy in 2002 but has kept an online presence.
And that's a hard switch to make, per Sonia Lapinsky at AlixPartners.
"Once the physical location is closed, you have to figure out how to be top-of-mind for the consumer, and that cost of customer acquisition and retention is so much higher than it was before," she said.
For many online shoppers, a toaster is a toaster is a toaster — and they just want the best price.
Originally published by Marketplace.org
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