Kmart Becomes Official Partner in Movie Promotions

Ambitious Effort Moves Far Beyond Licensed Merchandise

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NEW YORK (AdAge.com) -- Kmart is leveraging its 1,400 stores, merchandise categories and marketing budget to become a movie promotions powerhouse.

The retailer last year created a small program-development team, which would be dedicated to developing a more expansive entertainment strategy. Previously, movie properties and other entertainment scenarios had been handled by a field-marketing group, which Andrew Stein, interim chief marketing officer at Kmart, said wasn't effective.
For the first time, Kmart is crafting deals that make it an official promotional partner, as opposed to just a licensed merchandise partner, with blockbusters like 'The Dark Knight.'
For the first time, Kmart is crafting deals that make it an official promotional partner, as opposed to just a licensed merchandise partner, with blockbusters like 'The Dark Knight.'

Integrated strategy
"Under field marketing, it ended up being just an in-store activation with the movie. We pulled together some in-store signage and licensed merchandise in apparel and a little bit of home," he said. "It was more odds and ends vs. being an integrated story that worked in multiple marketing vehicles."

The retailer's new entertainment strategy is now coming to life through multipronged programs for blockbusters including "Indiana Jones and the Kingdom of the Crystal Skull," "The Incredible Hulk" and "The Dark Knight." For the first time, the retailer is crafting deals that make it an official promotional partner, as opposed to just a licensed merchandise partner. Kmart said that all the deals are structured differently and declined to comment on specifics.

"We did a lot of customer research over the last two years to better understand our customers and really glean some insights from them. [We found that] our customers respond very favorably to entertainment properties," Mr. Stein said. "And when you look at the marketplace, our competitors do much less around marketing and creating promotions around entertainment properties. We see this as a potential white space. Not to say that Wal-Mart and Target aren't doing it -- they are -- but they're doing less of it."

Catering to families
Mr. Stein and Tassie Anthony, marketing manager at Kmart, said that in the planning stages the retailer looked for family-friendly movies that would appeal to its customers, as well as movies that fit into holes in the overall marketing schedule. "The Incredible Hulk," for example, had a release date of June 27, less than two weeks after Father's Day. That led Kmart to craft a comprehensive "Incredible Dads" promotion, which included two free tickets with the purchase of a $50 gift card, a text-to-win sweepstakes and an in-store Hulk boutique, complete with apparel, accessories, games and toys.

"We had been [brainstorming] earlier this year Father's Day promotional ideas, and we ended up scrapping all that and coming to the 'Hulk' concept, because we felt it was the strongest concept for Father's Day," Mr. Stein said. "We used what we were going to spend for television and radio for Hulk messaging."

The redirection of marketing dollars to promote the movie and corresponding merchandise is a component that is quickly making the retailer popular with movie studios. Around "Hulk," Kmart deployed two weeks' worth of radio and TV advertisements, print ads in its circular, e-mail blasts and a microsite, much of which prominently featured the movie's opening date. In its 1,400 stores, the retailer ran trailers, radio ads and used "Hulk"-themed shopping bags.

"[Movie studios] all basically want a piece of that. They want us to build something like that with them," Mr. Stein said of the "Hulk" program. "We can help the movie studios drive interest and impressions for their properties, as well as sell licensed products."

Tied in to treats
The retailer is also leveraging its relationships with consumer products companies, such as Dr Pepper and Hershey's, to promote the movies. The purchase of three bags of Reese's Batman products will get you a ticket to "The Dark Knight." A similar promotion with Dr Pepper and "Indiana Jones" far exceeded expectations, Mr. Stein said, with the retailer plowing through double the movie tickets it had intended.

At the same time, Mr. Stein said, Kmart is getting plenty of mileage out of the deals and is already in discussions about next year's blockbusters. Ticket promotions and sweepstakes are driving traffic into the store, and advertisements of licensed merchandise are making Kmart a destination. "On the street, I heard two teenagers talking about the cool Batman graphic T that was in our circular," Mr. Stein offered as an example. "That's a huge win for us."
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