Kmart Australia’s Marketing GM A ‘Sucker For Great Brand Stories’
Michele Teague, Kmart Australia’s GM of marketing, describes her role in pulling the retail brand back from the brink of bankruptcy by embracing a new customer-centric model.
In 2008—in the midst of a recession—Kmart Australia was staring bankruptcy straight in the eye. Today, however, it is one of the most lucrative retailers in Australia. Its first-half earnings this financial year were $319 million, a turnaround credited, in large part, to its supply chain.
The turnaround also can be credited for Michele Teague’s joining the company. At the start of 2015, Michele Teague was ready to move from Sydney back to her native New Zealand when the opportunity of Kmart’s GM of marketing presented itself. Too good to pass up and now 14 months into the role, Teague is fearlessly embracing Kmart’s new customer-centric model and successfully executing on its communications strategy.
Read on for what she told us in an exclusive interview.
CMO.com: When did you make the transition to Kmart, and how has your role changed?
Teague: I started here 14 months ago. Before that I was the GM of marketing for the food and grocery division of Metcash, another huge goods company. The main brand in that group is IGA.
My role is becoming more and more of customer advocacy. I manage the traditional marketing functions and the digital marketing team. We are a huge advertiser, so a lot of our effort goes into the communication space. I also handle the insight function, which is becoming increasingly important since we moved to a more customer-centric model. I also look after the customer-service centre.
CMO.com: What attracted you to join the Kmart team?
Teague: This business is such a phenomenal story. I’m a sucker for great brand stories and turnaround. It’s really the culture and the leadership that attracted me to this job.
When they started the turnaround, they addressed their unique culture, rather than just focusing on the business. That was so refreshing. It’s absolutely true that you can’t turn around a business without having a strong culture and a whole lot of people who are passionate about your company’s goals.
CMO.com: How would you define Kmart’s corporate culture now that you know it on the inside?
Teague: Some people struggle to wrap their head around it because our culture is highly tuned and focused on results. Like all companies, we have values, but the difference is that we actually discuss ours.
Last year, we workshopped our values through team surveys. What we found was that boldness, which is one of our core values, was probably the least understood. We then embarked on an exploration of what it should mean for the company. We really walk the talk.
CMO.com: Kmart’s turnaround has been quite dramatic from a consumer’s point of view. What was the catalyst for this change?
Teague: I wasn’t here eight years ago when it all started, but there is a lot of folklore around. The core team is actually all still here. When I joined the leadership team, I was the first new person for five years. That’s very unusual.
In terms of fear, there is nothing like a burning platform. I have worked in a couple of other companies with the same situation and managed to turn things around. Boy, it focuses you. In some ways, I think the brands and businesses that make the biggest transition are the ones that do have that burning platform. It’s very difficult to change when you’ve got a status quo. We still have huge aspirations in the business, and complacency is our biggest fear.
The long-term goal at Kmart is still very aspirational. This is a story of both a back-end transformation and evolving our consumer proposition. Changing products is obviously part of it, but it is also about transforming the whole back-end of the business operations, the supply chain, and the sourcing business.
CMO.com: How would you define Kmart’s marketing philosophy?
Teague: We are all about the brand, and a lot of retail companies aren’t. They say they are, but their branding tends to be very technical and product-led. While a lot of our advertising at face value is about showcasing products, it’s also quite strategic. Our focus is on brand attributes and how these drive each piece of communication. A key focus for us is also understanding social and technological trends and innovation.
CMO.com: Why does this marketing philosophy resonate with consumers?
Teague: A great part of our proposition is our very low prices, and customers know that. We just slam-dunk when it comes to price. But our current campaign is actually all about product love. It’s about creating a much more three-dimensional brand for people.
CMO.com: A lot of companies would consider it risky to say “our products are low price.” Why is being honest in marketing still widely regarded as a dangerous approach?
Teague: If you talk about the lowest price discount retailer in Australia, people actually start thinking about horrible stores or warehouse formats; those are the generic norms. However, there are brands around the world that have broken out of that.
Our stores are not like warehouses. They’re not down and dirty. We provide a really nice environment. People don’t just come to us for basic essentials. They do all their shopping at Kmart, so we have broken out of those category norms, and we are absolutely proud of it.
CMO.com: How has social media changed Kmart’s and other retailers’ marketing directions?
Teague: It’s huge, and it’s really twofold. First, it keeps you honest. I can say from managing the customer-service team that the dialogue with customers on social media is immediate and ongoing. Second, we get instant feedback on your customer service and marketing campaigns.
Obviously, as a channel, everyone is still learning about social media. It provides us with great opportunities as a mass retailer and mass marketer. It has, for example, let us talk about categories that we normally wouldn’t put in a catalogue or on television.
We launched our Facebook page two years after [competitor] Big W, but we now have more followers than them. We’re driving it very hard. We only do about four posts a week, but our engagement per post is between five and 10 times more than most of our competitors. We’re really hitting the zone.
CMO.com: What are the top three attributes a marketing executive needs today?
Teague: The No. 1 skill you need is the ability to influence people; they don’t teach that at university. As a marketer, you are constantly looking to the future. You can be the person in the organisation who is activating the change. If you can’t influence people, excite them, or get them on board with your vision, you are just going to be stuck.
The second thing you need is analytical skills and the ability to be highly commercial. There has been a lot of dialogue over the years about why marketers are not moving into CEO roles, why they aren’t making it into the boardroom. I have always believed that I’m part of a team running a business, so I need to be absolutely across all the financials.
Finally, if you don’t love the creative process, you’re probably in the wrong job. The whole ambiguity of creative development is that it’s not black and white. You’ve got to embrace that ambiguity and be fearless to achieve the best outcomes.
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