Kmart showcases agile, adaptable business through technology adoption

It features the self-navigating robot Tory to enable real-time inventory tracking.

The Australian retail landscape, like all industries, has undergone significant changes over the past few years. This has meant that the retail brand Kmart has worked hard to maintain its position as a leading product development company and trusted retailer.

Despite some of the difficulties caused by these changes, the Kmart team have met all challenges head-on and has managed to continue leading the retail industry, proudly developing 80% of products sold through their own channels, and maintaining a number 1 or number 2 market position in almost every major product category.

The Kmart team are conscious of how value has become a stronger consideration for customers amidst an inflationary environment. This has meant that Kmart has kept up their relentless focus on keeping costs low, knowing that it has now become more important than ever.

Kmart’s unique scaling and sourcing capabilities underpin its low-cost business model, resulting in the delivery of the lowest prices to customers, meaning they are able to keep their prices low while other businesses are being forced to raise their prices. Kmart’s business model also helps drive greater demand and scale, whilst also allowing for advancement in its product and development capabilities.

“We believe that Kmart’s role is to make everyday products accessible to all, and our commitment to creating the latest on-trend products at the lowest price is one of the greatest ways we continue to do this for our customers,” Kmart said.

In addition to this, Kmart placed a real focus on digital technology as it continues to move forward as a business. From online shopping and delivery to inventory management and better design processes, technology has enabled the company to connect more closely to customers, better manage the volatility and challenges of supply chain disruptions and significant swings in demand, and help create a better customer experience.

One example of the ways Kmart utilises technology is through its 3D digital product design, which enables designers to create an animated 360-degree view of products to see how the fabrics hang, move and look on different-sized models. This also removes the need to send physical samples across the world, reducing lead time and wastage.

For customers, this technology benefits them as they have access to more detailed fits and sizing information, as well as a heap of analytics that allows the company to improve designs, and one day in the future it should even enable the ability to browse digital avatars rather than 2D product photos.

Meanwhile, Kmart has also invested in a multi-year programme to transform the in-store customer experience and deliver operational efficiencies and even greater value for customers. Under this, the company has invested in RFID technology to provide real-time inventory tracking. This led to the development of Tory, Kmart’s self-navigating robot.

Tory uses RFID technology to count stock by scanning ID tags on the products at a fast rate. Where Kmart would previously do a stocktake once a year, Tory can do it once a day. 

“When we have an accurate view of stock, we can help more customers get the products they want, when they want it, whatever channel they are shopping with us,” the company said.

Working overnight, Tory helps Kmart’s store team members focus on serving customers and helps them gain an accurate view of the products they have and where they are in the store. The result of Kmart stores using Tory is a quantum improvement in inventory accuracy for apparel from 60% accuracy at a stock-keeping unit level to 95% today.  

Kmart fully embracing these digital technologies has allowed it to maintain its status as a leading brand. This success has been recognised by the Retail Asia Awards, as Kmart bagged the International Retailer of the Year - Australia category win. The innovation brought by Tory was also recognised as it received the Digital Initiative of the Year - Australia win.

The prestigious awards programme gathers the region's best retailers and recognises major breakthroughs, innovations, and key players in the Asia retail industry.