Kmart's new recession play: Discounts for the unemployed
Filed under: Company News, Economy, Sears Holdings Corp.
Retailers may be seeing some improvement in their businesses, but they have one big challenge ahead: A lot of their customers are still out of work.
So Kmart has come up with a novel way to hang on to those customers until they're back at work and spending freely by giving them discounts now. The chain has introduced a Smart Assist program that will give the unemployed nationwide a 20 percent discount off 1,500 food and household staples from Kmart's various store brands.
The program was tested this summer in Michigan -- the first state to top 15 percent unemployment in 25 years -- and Kmart got praise there from the governor and the mayor of Detroit.
There are a few catches: The discount cards, which will be issued through January 2010, are only good for six months -- less time than many Detroit auto workers have been out of work. And while shoppers can apply privately on-line, they still have to present their unemployment documentation at checkout to use their discount card.
After a back-to-school season when parents had to put pencils and notebooks on layaway to make ends meet, the fear that a "jobless recovery" will gum up the works is very real. It's coloring even the rosier holiday sales forecasts.
Sears Holdings Corp. (SHLD), parent of the Kmart and Sears chains, has been zeroing in on customers who are tight for cash, in an effort to turn around its slipping fortunes. It has been pushing layaway for the last two holiday seasons at both chains and introduced a Christmas Club savings program to boost holiday sales.
While Kmart is probably the largest and most high-profile business to market to the unemployed, it's a tactic that small businesses have been using for a while. Throughout the recession, reports have trickled in about local merchants in hard-hit areas offering discounts to laid-off workers. One German brothel has reportedly offered 20 percent discounts to customers who can show they're on the dole.
It's marketing 101: it's easier to keep an existing customer than go out and rope in a new one. Customer loyalty is a tricky thing.
U.S. Representative John Dingell (D-Michigan) acknowledged as much when he praised Kmart. "These displaced workers will -- like our state itself -- get back on their feet and remember those who helped during this time of hardship," he said in a statement.
Discreetly offering cash-strapped regulars discounts keeps them in the fold when times get flush again. And with all the talk about a "new frugality" taking hold, retailers should keep that in mind if they want to get a share of shoppers' wallets once things turn around.
There are a few catches: The discount cards, which will be issued through January 2010, are only good for six months -- less time than many Detroit auto workers have been out of work. And while shoppers can apply privately on-line, they still have to present their unemployment documentation at checkout to use their discount card.
Sears Holdings Corp. (SHLD), parent of the Kmart and Sears chains, has been zeroing in on customers who are tight for cash, in an effort to turn around its slipping fortunes. It has been pushing layaway for the last two holiday seasons at both chains and introduced a Christmas Club savings program to boost holiday sales.
While Kmart is probably the largest and most high-profile business to market to the unemployed, it's a tactic that small businesses have been using for a while. Throughout the recession, reports have trickled in about local merchants in hard-hit areas offering discounts to laid-off workers. One German brothel has reportedly offered 20 percent discounts to customers who can show they're on the dole.
It's marketing 101: it's easier to keep an existing customer than go out and rope in a new one. Customer loyalty is a tricky thing.
U.S. Representative John Dingell (D-Michigan) acknowledged as much when he praised Kmart. "These displaced workers will -- like our state itself -- get back on their feet and remember those who helped during this time of hardship," he said in a statement.
Discreetly offering cash-strapped regulars discounts keeps them in the fold when times get flush again. And with all the talk about a "new frugality" taking hold, retailers should keep that in mind if they want to get a share of shoppers' wallets once things turn around.
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Reader Comments (Page 1 of 6)
9-29-2009 @ 12:55PM
jim said...
In texas you do not get any paperwork as it is all done electronically. How are you going to show any documentation.
Reply
9-29-2009 @ 8:27PM
marty said...
print it out
9-29-2009 @ 9:06PM
Tom said...
print it out
9-29-2009 @ 9:56PM
Jmik said...
All electronic in NJ too, but you can print it out when you file online.
10-01-2009 @ 9:11AM
SUSIE H. said...
When you complete your filing on your states Agency for Work Force Innovation website (or whatever your particular state calls it's Unemployment Website)...copy the page that says you have successfully filed your claim. That will be the page just before you verify...or re-verify your banking information. Also; you may copy the page that says "a check was issued in the amount of $.(whatever) dollars. That's the page that appears 1 day after electronic filing, and tells you how much your benefit check will be for that filing period. You may copy either page to file if you do not have a printer and email the copy to yourself to open it and print it when you are at a place with a printer. I believe you already knew this as you knew about electronic UnEmployment Benefit filing. I suspect your question: "What if you file electronically?".....was an attempt humor or sarcasm. However; if you really didn't know....consider yourself now informed.
9-29-2009 @ 10:52PM
Bob said...
Same in my state, most places these days I guess you do it by phone, rarely do you report to the office in person.
9-30-2009 @ 4:05AM
MIchael said...
Same way down here in Florida
9-30-2009 @ 6:33AM
MK said...
Jim,
I've been on unemployment for a few months now and yesterday went down to the Employment office/Career Center to get them to sign off on my Credit card protection forms (which they couldn't do) and they gave me an actual Identification card and put it in the system that I came in yesterday. If you know where your employment or career center is then you can just get the Identification card there. I think it's great that K-Mart is doing this but not many around, would be great if Wal-Mart, Target, and Publix would do the same.
9-30-2009 @ 8:55AM
Mary Jane said...
your weekly unermployment payment stub
you do get a check stub or confirmation even with electronic deposit
Looks like you are not with it!
9-30-2009 @ 8:37AM
Gerry said...
Same thing in NY
9-29-2009 @ 8:10PM
Jose said...
I don't spend much at Kmart but now I am going to
spend even less if they are not going to treat
all their customers equal. Boo Hoohoo for the
unemployed. They have more money not working
than I do. bye bye Kmart.
Reply
9-29-2009 @ 8:32PM
Janey said...
well, I'll tell you what, I hope that you become one of those people who are unemployed and I hope that it takes you at least three years to get a job. Then maybe you will learn just how wrong that you are.
9-29-2009 @ 11:53PM
Guillermo Sanchez said...
Your comment doesn't make any sense. Would you care to revise it pendejo?
9-30-2009 @ 12:42AM
Evie said...
You sound like such an idiot. Here a major retailer is trying to do something helpful for those who are having a tough time, and you have nothing positive to say. Your best bet would be if you have nothing nice to say, just be quiet.
You have no clue how hard it is for people to be out of work and not earning enough income to provide for their families. You basically are clueless and that's it.
9-30-2009 @ 2:30AM
Candice said...
we do not have health insurance, dental insurance, life insurance and any other items that are usually contributed to when you do have a job !!!!!
9-30-2009 @ 2:56AM
Katy said...
I agree, what about those on SSI or SSDI? It's a nice jesture for the unemployed but I would trade places with any of them.
9-30-2009 @ 8:17AM
j.peacock said...
I got hurt in july of 2007 and have had 2 back surgerys and just yesterday was informed that I'll never be able to go back to my profesion(mason) I worked in for 22 years. Be glad you are able to and you have gainfull employment. I on the other hand will need to go back to school to be retrained for a new profession at 40 years old. If K mart is able to help people when they are down on there luck then I say good for them. You need to have more compasion for your fello man and do what you can to help not be a jerk.
9-30-2009 @ 8:29AM
Denise said...
Jose,
Well I pray to God you never become UNemployed and spend months applying for a new job.. Any new job to help support your family. That was the most iggnorant thing I have ever seen anyone post. You are obviously one of those snobby people who have more then what they need and look down on the honest working class. I dont know where your information comes from that they have more money. They do not. My father has a seasonal job he gets laid off every year around Thanksgiving where you need a job the most. And unemployment does not even come close to what he makes working. So there should be programs to help the unemployed. But if you are already on any type of public assistance where you get free cash,medical and food I dont think that should apply to you. Thats not unemployed. So they should redefine unemployed to someone who was at work 40 hours a week and lost there job and needs some help.
9-30-2009 @ 8:51AM
Tomas said...
I'd MUCH rather see American businesses and citizens undertake kind and charitable causes than our Government. THAT is the true spirit and grace of America; to give the underdog a break, and to allow those who err a second chance.
The attitude that you convey is petty and selfish, Jose. In YOUR place, I would pray that others afford me (you) the mercies that I (you) was unwilling to afford others less fortunate than I (you).
No one loses anything by allowing those less fortunate than themselves a bit of dignified kindness. Be very careful, Jose. Life has an odd way of duly compensating people with values like yours. In other words, "What goes around, comes around." You could have some rough road ahead of you.
I'd bet that you would be the first to "Boo Hoohoo" if you took a loss, were slighted, or weren't allowed a break if you were in need. I hope that you don't have children who would learn your selfish values. If other Americans adopted your values, America would be in some deep Do-do (Hoohoo). You're probably such a tight butt with your money, that you squeak when you walk. Grow up, Jose. Contrary to what you believe, it's NOT all about you.
9-30-2009 @ 10:04AM
Beth said...
You obviously JOSE have never been on unempolyment before because if you were you would know in that dumb head of yours that you don't even get HALF of what your paycheck use to be.