At Kohl’s Corp., it’s going to be a very different holiday season.
Selling floors are less crammed with merchandise and have fewer fixtures, though there are more mannequins displaying outfitting ideas. Men’s and women’s sportswear has been reflowed to spotlight casual and active offerings — Kohl’s’ sweet spots.
It’s the store’s first Christmas season for selling Calvin Klein and Tommy Hilfiger fashion, the in-store commitment to Lands’ End has doubled, and through the home and fashion areas, Kohl’s is banking on styles that executives say exude comfort, coziness and stay-at-home lifestyle, with family pajama sets, fleece, Cuddi Duds, Uggs and other such brands and items. Additionally, Kohl’s has put greater emphasis on selling Black- and female-owned brands, clean beauty and sustainable clothing offerings, and inclusive sizing.
Activewear is also critical. Nike, Under Armour, Adidas and Champion are the store’s four top active brands, while Kohl’s proprietary FLX athleisure brand, launched in the spring, has been rolled out to 500 doors for holiday. Women’s activewear is expected to see “outsized” growth this holiday, with active lines more prominently positioned closer to the front of stores and given more space. For the past six years, Kohl’s has been building up active offerings, and last year, the sector represented 20 percent of the business and is seen at about 30 percent ultimately.
Those are just some of the changes and new tactics at the Menomonee Falls, Wisc.-based retailer for what’s expected to be a strong holiday season across the retail industry. It will also be a very competitive and challenging season due to supply chain disruptions causing potential stockouts, labor shortages at stores, warehouses and call centers, COVID-19 and increased consumer demand.
In a joint interview Wednesday with Doug Howe, chief merchandising officer; Paul Gaffney, chief technology and supply chain officer, and Greg Revelle, chief marketing officer, it became clear that Kohl’s wants to be more of a holiday gift destination as the executives discussed new merchandise and operational tactics for the fourth quarter.
Many of Kohl’s competitors, such as Macy’s, Walmart, Target and Amazon, started their holiday campaigns weeks or even months earlier than in 2020. But Kohl’s hasn’t changed its timing, despite also seeing people doing their holiday shopping earlier in October. “We officially start our holiday campaign Nov. 1. We have been doing that for a couple of years. Our big kickoff event is the first weekend in November,” Howe said.
Citing some key changes on the selling floors, “We removed on average 300 fixtures from the stores — four-ways and six-ways in apparel for the most part and some shelving units in home,” Howe said. That’s partly due to operating with less inventory this year, but it’s also about elevating the shopping experience, Howe said. Kohl’s has created wider aisles and additional “trend zones,” and more outfitting solutions through the store in men’s and women’s departments. It’s also the first holiday season for Sephora at Kohl’s. There are currently 200 in-store shops for Sephora, which also sells on kohls.com.
“Kohl’s shoppers can expect to see a new, more modern Kohl’s store this holiday season,” Howe said.
Regarding the merchandising shortages that are expected to be widespread through the industry, Gaffney said Kohl’s has been working “super hard for months” to get enough merchandise to meet the demand. “We are feeling confident entering this holiday season that we are in a really robust inventory position. It will be better in some categories and not as good as others, but we are feeling good about” inventories. “Customers are getting a lot of signals to shop earlier.”
Kohl’s, which generated $15.95 billion in revenues in 2020 versus $19.97 billion in 2019, has the reputation of being very promotional. During COVID-19, the company developed the ability to transition its promotion platform faster, to about a three-week period, so it can “lean” into hotter items, assuming the supply is there.
With the popular Kohl’s Cash program, which runs periodically, customers this season can spend less to get the reward. For the first time, $5 on $25 “qualifying” kohls.com orders will be offered, provided the order is picked up at a store. It’s a move to help reduce delivery costs and bring greater traffic into the stores. Typically, Kohl’s Cash rewards are $10 or $15 for every $50 spent.
With staffing, Gaffney said Kohl’s 1,100 stores are on track to meet holiday hiring goals while the nation’s “super tight labor market” poses some challenges in distribution and fulfillment facilities. More fulfillment of online orders is expected to be done in the stores where Kohl’s, while operating with less inventory overall this year, has put stored extra inventory at nearly 300 of its stores, deemed “omnipower centers,” to help meet customer demand. They have increased capabilities during peak periods by equipping the stores with more inventory, technology and process improvements so store associates can be more efficient responding to customers. They have handheld devices enabling them to support online order fulfillment from the stock rooms or sales floors, to find items quickly.
In addition, for the holiday season, Kohl’s is increasing the number of drive up parking spots for customers opting to pick up kohls.com orders at their local store as it has designated self-pick up where they can access the item through a personalized link and code. Self-returns are also being piloted whereby customers can initiate product returns from their phone once they arrive at the store, making the returns process more convenient. Kohl’s continues to accept Amazon returns.
As part of a diversity and inclusion agenda, Kohl’s for the first time has partnered with Univision to create custom product segments for “Despierta America,” the network’s morning show.
Key social media partners include Pinterest, Instagram, TikTok and Facebook. Kohl’s will use Instagram Live to share real-time gifting ideas making it easy to purchase in the moment. New this year, live shopping will expand onto TikTok with content that’s focused on helping consumers create shopping lists and prep for the holidays. Kohl’s also sponsors Freeform’s “25 Days of Christmas” programming of holiday movies. And Kohl’s will be advertising during college football for the first time to reach younger audiences.
According to Revelle, though Kohl’s overall marketing spend is down from pre-pandemic levels, digital marketing has grown to represent well over 50 percent of the budget. “We have driven a lot more spend into that channel and we are leaning in on what’s hot, more than last year.”
To support online growth, earlier this year Kohl’s opened its sixth e-commerce fulfillment center, and modified the checkout process on kohls.com and the Kohl’s app. “The payment, delivery address and confirmation that you had the right stuff in your cart, had been on four separate tiles over the past year. We compressed those four clicks into one step. We doubled down on better design for ease of use,” Gaffney said. “Holidays can be chaotic and joyful. Our mantra is reduce the chaos and up the joy.”