DETROIT (FNS) -- Kmart, Troy, Mich., will expand its in-store electronic shopping system from 10 pilot stores to 50 Detroit-area units this summer, and to a total of 100 Big K and Super Kmart stores nationwide by year-end, said officials at the company's annual meeting here.
"Kmart Solutions," located at the service desk of Kmart stores, allows shoppers, with the help of store personnel, to shop via computer for merchandise and services not available in the store. The system offers financial services, such as money orders and money wire transfers. It also provides big-ticket items, such as big screen televisions and children's play equipment. Customers also can rent a car or order flowers through the system. "Kmart Solutions combines the potential of electronic commerce, the choice and assortment of catalog shopping, along with the service and personalized attention of an in-store retail shopping experience," said Kmart Chairman Floyd Hall.
Referring to Solutions as "a virtual store within a store," Hall said the full range of products and services has not yet been decided. Expansion to the 50 Detroit-area stores will help the retailer determine what customers want. However, Hall predicts large screen TVs and flower delivery will do a brisk business.
The in-store system eventually will be tied in with Kmart's Internet shopping system, which will be up and running by late summer.
"We know there is opportunity in electronic commerce if it is executed properly and with a true understanding of the types of products shoppers are comfortable buying over the Internet," said Hall.
One shareholder attending the Kmart annual meeting questioned why the retailer was operating in the food business in its supercenters -- since margins in the food business are so low.
Hall agreed the margins are low, but he noted that offering food items at Kmart stores increases volume, and inventory turnover is rapid.
"Over the past three years, the rate of decline in margins has been declining due to competitive forces," he said. "So we have to increase volume."
Improved inventory turnover to improve Kmart's working capital position and eliminate its need to borrow is among Kmart's top four objectives.
The few complaints by shareholders centered on the problem of advertised merchandise not being in stock and long check-out lines -- the two areas that top Kmart's to-do list for improvement, said Hall.
Hall told shareholders Kmart will continue its initiative to roll out the new Big Kmart format. By year-end 1998, Kmart will have converted 1,181, or more than half of its stores, to Big Kmart stores.