‘Low prices for life’: Kmart doubles down on value as inflation stings customers

and what’s to come,” said Kmart’s chief customer officer Lil Velis.

“We know it’s more important than ever to give Australian and New Zealanders access to products that won’t break the bank, and we’re incredibly proud to continue to deliver on this commitment.”

In a recent survey by the Australian Retailers’ Association and Roy Morgan, 42 per cent of respondents said the rising cost of living would impact how much they spent on gifts for Father’s Day – a troubling sign for the upcoming holiday season, when many retailers make up the bulk of their sales for the year.

Yet, despite the fact inflation and cost of living is beginning to bite, customers are still spending. According to the Australian Bureau of Statistics, retail spending rose to a four-month high in July, though the data itself is likely skewed slightly by the fact that prices are higher, therefore people are spending ‘more’.

What’s undeniable is customers’ push toward value-based purchasing. Last week, supermarket giants Coles and Woolworths both outlined a change in customer behaviour – away from more expensive brands, and ‘trading down’ to cheaper, white-label products. Coles went so far as to freeze the prices across over 1000 of its most popular items in an effort to draw in customers wary of their own spiking costs.

Low prices for life

Kmart’s head of marketing Rennie Freer said the rising cost of living was central to the discussion around the campaign, and that following the massive changes to Australians’ way of life following the initial shock of Covid-19, Kmart has an opportunity to serve them in their time of need.

“We’ve all been through a significant period of change, and through that I think Kmart perhaps moved away from what we were really famous for,” Freer told Inside Retail. 

“When I joined 10 months ago, it was really clear that we needed to reset our brand strategy, and focus on launching a platform that showed what is important to us as a brand, and is compelling to our customers.

“We’ve been through probably the most profound period of change in the last three years, probably for several decades, and it’s not going to stop. We know our customer needs are not going to stop changing, and whether it’s our marketing or our focus, it’s all going to be through the lens of creating that value for customers.”

In order to get the campaign right Kmart surveyed its customers to find out why they shop with them. Overwhelmingly, Freer said, customers shop with Kmart for its value. As a result, the business has invested in keeping costs down, and is refocusing itself to speak to its customers more clearly.

“’Low prices for life’ is not just a tagline,” Freer said, “it’s a commitment. When you have the power of a business aligned around something that’s so powerful, but so simple, it can be incredible.”

The holiday season approaches

By Freer’s own admission, 2022’s Christmas period is going to be a “big moment“ for Australian retail. At the tail end of 2021, some cities were still grappling with lockdowns, leading to the second year of impacted holiday sales, but Australia has managed to hold off from shutting down retail for most of 2022.

“Everyone’s keen to spread their wings,” Freer said.

“[For Kmart], it’s all about extending customer choice, and making sure that, with customer behaviour changing, we’re always there for our customers.”

This year, Kmart has more stores than ever before open, and many will be available 24/7 in the lead up to Christmas. Plus, the business is running potentially its biggest ever Black Friday promotion in the lead up to the holiday, and is working with external partners to speed up its click-and-collect process during the holidays.

Kmart will also continue its Wishing Tree tradition, which encourages local communities to donate gifts or a cash donation, both of which will go to the Salvation Army to help those in need.

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