xxix) Kmart (Australia)
Introduction
Kmart is changing from a retailer to a product-making company.
Kmart is part of the Wesfarmers conglomerate that started focusing on its own brands like Anko, initially with kettles, in 2019. By mid-2024, 80% of sales across Kmart's 300+ stores are now from Anko brands.
“… More than1 billion Anko products are now sold each year…”
Patrick Durkin, 2024a
The journey
“…If you think about what we now do as a business, we spend as much time, if not more, on developing products from design, through to manufacturing and distribution, as we do retail them in the store, which is almost like a final step in the process…”
Ian Bailey as quoted by Patrick Durkin, 2024a
Anko is launching partnerships with the US toy giant Mattel, Walmart (starting in the USA and branching into Canada and Central America), pet food products with Carrefour (France), etc.
The potential upside is significant in Au stralia as
“…Kmart has only 7% of Australia's $45 million apparel market, 8% of $ 34 billion beauty market, and 10% of the $34 million home and living market…”
Patrick Durkin, 2024a
One of the keys to their success is the increasing use of technology and data in product designs
“…The new product design and manufacturing software system means we can capture way more data than we ever could, on every single product we sell.
When we get data, we can run algorithms to say, what were the attributes that made that product successful? We can see the next evolution of the product……got analytics, use machine learning using our own data. We can do range and marked-down optimisation in stores……robot who goes around overnight and scans all the apparel and gives us a location, so effectively doing a daily stocktake…”
Ian Bailey as quoted by Patrick Durkin, 2024a
Furthermore, it has dropped prices on around 1300 items.
Kmart has around 50,000 staff. They are keen to hire staff with the right cultural fit, ie
“… Low ego and a genuine desire to put the business first…”
Patrick Durkin, 2024a
Also, they favour younger employees.
Financial performance is impressive
“…in the first half of 2024, the Kmart group (including Target) delivered revenues of $6 billion and record earnings of $601 million……an increase of 26.5%...”
Patrick Durkin, 2024a