WISCONSIN: Kohl’s, the 55-year-old department store chain is a brick and mortar thriving at a time when many traditional retailers are busy fearing the Amazon effect on their business. Here’s what Kohl’s has been doing.

In its latest earnings call, Kohl’s reported positive growth amid investor excitement around its online strategy. Its key focus, however, is to drive traffic in-store.

  1. Focus on experience
    Part of Amazon’s effect on the retail space is the smooth experience of buying from its site. Matching such an experience end to end has proved incredibly difficult for traditional retailers. Like Amazon, Kohl's has also focused on making it easier for customers in-store to find what they need quicker.

    "We're more focused on it being a great customer experience and making sure that the customer is happy when they do arrive in a Kohl's store because that gives us the best opportunity to convert them into a sale," said former CEO Kevin Mansell in March, according to Retail Dive.

  2. Don’t compete, partner
    In late August, the company extended the trial of allowing Amazon returns in Kohl’s stores. Given that Amazon is more or less unbeatable, a path to growth could lie in facilitating a service that drives traffic. New CEO Michelle Gass said, in comments reported by CNBC, that the company has so far been “very pleased” with progress.

  3. Smaller stores
    Like other formerly expansive out of town retailers, Kohl’s has been exploring more urban outlets. However, the rationale is one of cost and inventory cutting, an initiative that Gass called “rightsizing”. This is good news for investors, as the initiative is designed to increase profitability.

  4. Go local
    “Localization has allowed us to have the right product in the right store at the right time,” said Bruce Besanko, CFO. With smaller stores, inventory must decrease, but opportunities for an expanded distribution network increase. A key example of success in this strategy comes from Brazil, where the retailer Magazine Luiza is challenging Amazon for dominance in the country by leveraging online and in-store human experience. For Kohl’s, the opportunity is obvious. Eight in ten Americans live within 15 miles of a Kohl’s.

  5. Speed up
    As far back as 2014, Kohl’s has been trying to reduce the time from product idea to shop floor down from 16 weeks to just eight. The strategy appears to be paying off, accounting for as many as 40% of the total receipts for the year. Fashion becoming faster than fast has characterised the retail conversation for some time. In March, H&M experienced problems when operating profits plunged as the company struggled to adapt to the pace of the internet.  

Sourced from CNBC, Retail Dive, ZDnet, WARC