Through her omni-media presence, Martha Stewart has shown consumers that "elegant" and "homemade" are not self-cancelling words. Now through her domestics product line at Kmart, she is proving that "style" and "discount" can coexist as well

When Martha Stewart announced the launch of her Martha Stewart Everyday (MSE) product line at Kmart stores in 1997, many of her parchment-sheet using, mandolin-slicing loyalists recoiled. Teaming up with the discount giant was the retail equivalent of serving screw-top chardonnay alongside rock cornish hen. How could her impeccable taste and nuance stand up under the glare of Kmart's fluorescent interiors and Blue Light hucksterism?

Quite nicely, in Stewart's view. Kmart would offer her domestic design principals to the chain's 71 million customers while proving to manufacturers that a market exists for affordable design quality. In many ways, that has been Stewart's mission all along.

Through lavishly illustrated best-selling books, Martha Stewart Living magazine with a circulation of 1.2 million, a syndicated column and a syndicated TV show with an audience of 49 million, she has almost single-handedly changed America's tastes in cooking, entertaining, home decor and gardening. Her appeal has not been so much with those who identify with the lifestyle featured on the pages of Architectural Digest, but with people more likely to have been reading Woman's Day and yearning to instill elegance and style into their budget-conscious lives. What Stewart has done is to show them that you don't need servants and caterers to live beautifully. It is possible to do it yourself and to prove it, she demonstrates how.

A product line exclusively with Kmart was a logical extension of Stewart's message. With more than 2,100 discount stores, Kmart attracts 72 percent of the nation's households. Kmart's sheer mass-market volume gave Stewart the leverage in pricing and manufacturer retooling needed to produce goods more reflective of upscale boutique retailers. "My idea is to bring good quality design to mass America at affordable prices. I feel people have been badly served in what they've been offered," explains Stewart. "I never underestimate people when it comes to design. Look at how TV brings you into others' homes and allows you to see how graciously you can live. It's been my feeling all along: Don't talk down to people about good design choosing it is not about how much money you make."

Adds Stephen Doyle, creative director of Doyle Partners, which designs and manages MSE's packaging and retail display: "What we've seen in the success of Martha Stewart Everyday is that you can put good design out there on a mass level and customers respond."

Case in point: Stewart's initial foray into Kmart with her line of bedding and towels four years ago. The retailer was the first to introduce all-cotton bedding products at affordable cost. Customers took to them immediately. MSE domestics rung up $450 million that first year and became the nation's No. 1 home textiles brand the following year. Sales of bed pillows alone grew by 25 percent after being packaged under Martha Stewart's name.

"Previously Kmart hadn't sold high-count cotton sheets. Overnight, we took 200-thread count sheets and made it into a $150 million business," says Steve Ryman, Kmart senior vice president and general merchandise manager/home and MSE. "Now `Better and Best' (higher quality and price-point merchandise) is 45 percent of our (linens) business. It's obviously bringing in a new customer or someone who had not found what they had been looking for previously. The value of the Martha Stewart customer's basket is significantly greater than the rest of our customers. Martha Stewart Everyday's better products, packaging, labeling and in-store signage have impacted the overall image of Kmart."

That impact underscores the biggest retailing turnaround story in years. After Kmart's brush with near-bankruptcy in 1995, MSE infused a new image and credibility to the struggling discount chain. So much so that one of Kmart's CEO Charles Conaway's first public appearances was to unveil MSE Kitchen last year, pledging it as a future growth priority.

The launch of MSE came at a time when mass merchandisers were increasingly attracting upscale shoppers who simply didn't want to spend a lot more money for certain items. Consumers were looking for style, not only value. This was also proven true by Kmart's rival Target which had signed up legendary architect Michael Graves in 1999 as a product designer. But Graves' elitist architectural reputation pales next to Stewart's kitchen-sink ubiquity. Possessing an image fueled by her media empire, more than 60 percent of Kmart's customers recognize the Martha Stewart brand. From MSE's launch in 1997, through the end of fiscal 2000, she has generated more than $1.4 billion in sales at Kmart. Ryman expects MSE sales to hit $1.6 billion this year.

More recently, MSE product offerings expanded into everything from bundt pans to bugsprays. In June 2001, Kmart adds MSE Keeping, which ranges from wastebaskets to closet organizers. September 2001 brings MSE Home's line of lamps, pictures and mirrors. Key to the success of MSE is design, both in the products themselves and in their packaging and retail installation. The team at Martha Stewart Living Omnimedia retains complete control of product design and development, packaging, in-store environments and advertising.

"Stephen's role is to make our products look very appealing and exciting. It's hard to distinguish products in Kmart or in most retail establishments, for that matter," asserts Stewart. "Stephen and (Omnimedia creative director) Gael Towey have worked very hard to create a store-within-a-store environment."

Doyle happens to be married to Towey and had also worked on a promotional piece for the launch of Martha Stewart Living 11 years ago. But it was Doyle's connections to Kmart, through his packaging redesign for store vendor Springs Wamsutta, that led to his collaboration on the debut of MSE's domestics line.

Doyle describes Stewart's retailing goal as one to rid the world of flouncy, burgundy valances. "We try to be responsive to what Martha Stewart brings to the category. We want the packaging to be modern, bold and bright," he says. "With plates, for example, everyone else has stacks of square boxes where you see little half-moon slivers of color. We design ours so they stand upright and you see lots of big colorful polka dots. It's common sense with a touch of fun thrown in. We want every product, no matter how mundane, to appear very exuberant on the store shelf."

MSE's gritty charcoal bags, for instance, are designed to look like summery striped Brooks Brothers' shirts. Labels on gratin dishes have friendly little ears shaped along handles; bundt pans sprout bright yellow labels that make their contours stand out like sunflower blossoms. For wine glasses, Doyle Partners' literally turns their minimal packaging inside out: Product information is viewed through the stemware in a party-like background of stripes and dots. "When we design packaging, we do it as if it's for people who don't understand the language. We make it so people want to touch it. We make it engaging to the senses," Doyle continues. "Even in configuring the packaging cardboard, we do it with the idea of `Hey, touch me. Pick me up.'"

"What's especially fun for us is moving beyond design problems and into those affecting retailing," Doyle says. Festive ribbons of packaging delineating by color Good, Better and Best product lines attract shoppers from across store aisles. A wall of over 150 kitchen tools is organized by a disciplined grid and uniform packaging. "The gadget wall is normally a random mess," says Cameron Manning, MSE project manager at Doyle Partners. "We've made it into a coherent mass."

Color is as important to packaging as it is to product design. Beginning with the hues of Stewart's famous Auracana chickens and their pale blue and green eggs, MSE's namesake has always had a strong point of view about color..

"Kmart originally had wanted the worst colors. They wanted everything to be dark maroon and dark green," laughs Stewart. "I said to them: Why not a light yellow or pretty blue? We did that and customers responded. I knew that would happen."

For her first palette, Stewart spent nearly a day with her company's color consultant, showing as inspiration things like Wedgwood china and images of her cat or grass growing in a Texas field. For her line of sheets, for instance, she personally selects color choices.

"Martha Stewart has always had an incredibly sophisticated taste in color," says Doyle. "She got interested in compatible neutrals and has since built up an understanding of the need for vibrants." Doyle appreciates that sensibility and actually named her paint line Martha Stewart Everyday Colors. "Why do they call it paint?" he asks. "Paint is only paint when it's wet. When it's on the wall, it's color." For their own home, Doyle and Towey used to have to buy conventional paint and mix in grey and white to achieve the kind of hues Stewart sells. While most paints come in cans with ugly metallic labels, the designers created cans to reflect the subtlety of Stewart's colors. Executives at the paints' manufacturer, Sherwin Williams, said men would never buy the paint. Within two years, Everyday Colors became the fifth-largest selling brand in the world.

Stewart herself has a point of view and signs off personally on most of MSE designs for products and packaging. "Packaging plays a very important part in a successful program. I've always been intrigued with the way people deal with packaging problems," she says. "The clarity of the idea has to shine through. It should allow you to feel an item and look at it. It helps to stack the item, distinguish it, protect it and, at the same time, informs you about it without being wasteful in use of materials.

"I can't stand overpackaging and things like extruded styrofoam," she continues. "I buy something sometimes and I can't get it out I need a screwdriver. Packaging must never be overdone or excessive.".

Towey, who has worked with Stewart for some 18 years and whose obstetrician grandfather actually delivered the homemaking doyenne acts as an apt interpreter to her husband when it comes to those tastes. Martha Stewart Omnimedia staffers also work closely with Doyle Partners for good reason.

"The magazine's information philosophy is very integral to the whole idea of our retail," asserts Towey. "It's informational as well as inspirational. Imagery on a package of knives not only shows you what kind of knives are in there, but also uses samples of cutting techniques that show you why you need a chopping knife or a paring knife or whatever. For an iron skillet, we give you recipes showing how you can bake a cake in it or fry a chicken. Steve's job is to make that informational element crystal clear."

That kind of information on higher-end product lines helps sell customers on the utility of their purchase. But MSE's editorially-driven philosophy is not lost on the most inexpensive, easily-discarded of packages. The front of MSE seed envelopes use hands to give a sense of dimension to the flowers, fruits or vegetables within. Recipes on seed packets offer tips beyond the garden. MSE's herb garden packages provide ideas for brewing your own tea. Even the names selected for Stewart's paint colors almost sound like a table of contents: Dried Hydrangea, Purple Fig, Potato Peel, Meringue..

In the context of Kmart's broad general merchandise offerings, MSE's consistency of image stands out on shelves with a quiet air of authority and product integrity. While seeking to instill a higher-level consumer sophistication about the design of everyday stuff, MSE's greatest success at Kmart may well lie in convincing bottom-line results proving such a market exists.

"The product is beautiful, the packaging is accessible and aspirational all at the same time, but what is staggering is the numbers: Do you know how many towels 71 million people buy?" asks Doyle. "If you folded and stacked the initial order for Martha Stewart Everyday towels they would reach to the top of Mt. Everest, 13 1/2 times and that's just the (lower-priced) Blue Label towels!"