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Discount retailer Kmart plans to court Gen Z beauty fans and storage fanatics as it works to extend its winning streak by expanding some of its most popular product ranges.
The social media-savvy Generation Z shopper had become increasingly important, the boss of the Wesfarmers-owned retailer, Ian Bailey, told investors at a strategy day on Tuesday. Bailey said the demographic would be a focus as the company developed new products.
Kmart Group boss Ian Bailey says the discount retailer is also a product developer. Credit: Wayne Taylor
Kmart has been reaching young shoppers via social media, and in a presentation, the company said it had generated 3.3 billion impressions across search and social media platforms in the 12 months to December.
“Beauty and storage are examples of existing categories where we are looking to build out our current range,” Bailey said.
“Beauty is a category where we see a strong consumer demand for value, especially among younger customers.”
Social media content about Kmart’s storage solutions has boomed in recent years, with TikTok content creators making clips about the group’s organisation products garnering millions of views.
“Storage is a category where our products, delivered with design and value in mind, have historically been well received by customers – but further opportunities exist to expand the breadth of the offer,” Bailey said.
Kmart has been a beneficiary of rising costs of living and revenue for Kmart Group, which includes fellow discount retailer Target, hit $5.7 billion for the six months to February.
Bailey said the average Kmart consumer spends $480 with the retailer each year, but there was space to further grow “share of wallet” – the amount a current customer spends with a company rather than its competitors.
Kmart has had significant success with its home-brand range, Anko, and is working to expand the range internationally.
It launched the brand into Canada this year and is considering other partnerships.
Wesfarmers boss Rob Scott was upbeat about the prospects for the company’s retail brands, including Kmart, Bunnings and Officeworks despite cost of living pressures.
“We expect value to become even more important for customers, and we are seeing that today … with more customers trading down within categories and increasing their share of spend in more value-orientated products,” he said.
“This benefits us, not just in reinforcing the core of what our businesses do, but we’re also seeing a trading down into some of our businesses, which is improving the number of customers that are trading with us.”
Wesfarmers shares declined by 3.1 per cent on Wednesday, closing at $47.78.
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