Kohl’s CEO says company is ‘stronger coming out of the pandemic’
Kohl’s CEO Michelle Gass believes that steps the retailer took before the onset of the pandemic and those it has taken since have positioned the department store retailer to achieve new levels of success going forward.
Ms. Gass, speaking at NRF Retail Converge earlier this week, said Kohl’s was stronger for a number of reasons, including its fundamental business strength, an empathetic culture that supports and empowers associates, improved shopping experiences and merchandising that aligns with the needs and wants of consumers.
She said that three major trends — comfortable/casual clothing, easy shopping experiences and value for the dollar — were all present prior to the onset of the pandemic and later accelerated as COVID-19 spread across the country.
Ms. Gass said, as a result of the pandemic, the bar has been raised on consumers’ demand for “ease and convenience” but that hasn’t taken away from their desire “to score” when they are on a shopping trip. “If you’re coming into a store, you want to be surprised, you want to see new things,” she said.
Kohl’s CEO said that “stores are key and we are thinking about them differently” as they become the center of the chain’s physical and digital activity. Customers who buy from Kohl’s stores and online are “four to six times” more productive from a sales generating standpoint. These customers also are loyal, as the added convenience of being able to shop when and how they want creates deeper relationships.
The retailer is also making its customers’ lives more convenient through partnerships with Amazon.com and Sephora. The chain, which began offering returns on Amazon orders in 2019, has found that the relationship has helped drive traffic and acquire new customers over that time. Kohl’s plans to have around 200 Sephora shops inside its stores by the fall with 400 more to be added next year and around 850 in place by the end of 2023.
Ms. Gass has said that Kohl’s has made shopping easier and more convenient with reimagined store layouts that offer more space within aisles and racks. The chain was able to achieve this, in part, because of an aggressive assessment of its inventory that resulted in a significant reduction in SKUs. The result has been higher turn rates for Kohl’s inventory and the ability to run more full-price sales and fewer clearance ones — all good top and bottom line news for the retailer.
DISCUSSION QUESTIONS: Do you see Kohl’s in a strong position relative to its primary competition at this point and time? Where do you see the retailer’s greatest opportunities and challenges over the next couple of years?