Greg Revelle is Chief Marketing Officer of Kohl’s, a major US retailer with 1100 stores in 49 states. He is a member of the ANA’s Global Leadership Coalition on COVID-19, in partnership with WARC and Cannes Lions. He talks to Catharine P. Taylor, US Commissioning Editor at WARC, about its COVID-19 media mix, adapting creative production to map quickening changes in consumer trends, and other issues during this unusual time.
Marketing in the COVID-19 crisis
This article is part of a special WARC Snapshot focused on enabling brand marketers to re-strategise amid the unprecedented disruption caused by the novel coronavirus outbreak.
Some top-line insights:
- As the pandemic unfolded, Kohl’s partnered with Pinterest and Facebook to understand what customers were talking about and searching for, and discovered that trending topics went from changing every month or two to changing every day or two.
- Faster trend cycles meant Kohl’s had to speed up its creative process, so it could develop channel-specific advertising and have it in market in 48 hours to respond to trends.
- Marketing has become far more interconnected with the other functions within the organization. For example, its understanding of what customers need to feel safe has influenced processes in the HR department.
- After pulling its TV budget and shifting to digital until stores re-opened, Kohl’s is coming back into TV, but flexibility in the immediate term is key so media can be increased or decreased more quickly.
Kohl’s shifted budget entirely from traditional media and very heavily into digital as retail locations closed. Could you walk us through that decision?
As we looked at digital specifically, that was going to be our business for the foreseeable future, and it was apparent that to drive digital, we really needed to concentrate our spend digitally as well. And, then we also upped our cadence, particularly in social – that was a channel we saw customers just gravitating to as part of the COVID crisis. We also saw search activity increase quite a bit as well. We not only had to bring our expenses down. We also saw [digital] media consumption going up dramatically, so it just made a bunch of sense to shift our mix in that way. It wasn't easy to do because we had a lot of commitments with broadcast partners and print partners, etc., but they have been tremendously helpful through that process.
How did you need to change your messaging?
One of the things we did to really understand the customer and get the pulse was partnering with Pinterest and Facebook in particular to understand: What were customers talking about? What were they searching for? And we quickly discovered it was actually changing dramatically from day to day – more so than we've ever seen. We've always done social listening, but the cycles were generally pretty long, maybe a month or two. But the trending topics accelerated to changing in a day or two, so that required us to change the way we thought about creative pretty dramatically.
Our traditional process didn't accommodate the lead times necessary to work in that environment. And so we shortened our creative process pipeline pretty dramatically. We have, fortunately, two kinds of ways we produce creative. We have one called the Omni process, which is where we create a standard library of imagery that's used across every channel, whether traditional print or television. And then we have a final production capacity where we take all that imagery and produce creative on a channel by channel basis. We had to increase the throughput of our channel-specific advertising. We changed our process to go from about two weeks to about two days, so we could identify a trend and then have media in market in about 48 hours, which is hugely beneficial as these trends are changing.
Is that setting the stage for how quickly you'll be able to work in the future?
That's one of the things we want to keep as part of our process. As we looked at everything we do, actually getting out of print is helpful for the time being because there are particularly long lead times with print. So that's enabled us to be faster – and then just inventing new processes that really distribute decision making down in the organization. We want to keep a lot of those practices going forward.
Is your pivoting back to more traditional media timed to when stores open?
That's exactly right. We're thinking about our media as aligning it with customer demand. Our customer demand is going to be obviously associated with digital, but because about 75% of our sales are typically in stores, we anticipate our demand really revving as our stores reopen. And in fact, that's what we're seeing. As those openings complete, we expect to be back into a lot of the media we had exited.
Back-to-school is a big occasion for Kohl’s. How are you doing scenario planning for an occasion that might be different if home schooling is still common?
That's another really fast-changing area. There are two elements to what we're thinking about. One is, are we still going to have demand for back-to-school products? And the answer we think is yes, because a fundamental aspect of kids is that they grow. A lot of customers have been holding off on apparel purchases in particular, but it applies to footwear and a lot of what we sell. There's just a natural replenishment cycle and, that shouldn't change too much.
Now, the messaging itself has to be much more flexible, and so it's not going to be as centered on the actual school. And so you think creatively. We have to be able to accommodate this idea of whether you're back-to-school, or back to home-school. We want to be relevant for you.
How has your e-commerce strategy been bolstered or changed, to reflect that e-commerce is going to be a much bigger deal going forward?
We've had a very strong e-commerce business really since our stores closed across the country, and we do anticipate that continuing, for at least a while.
In terms of things we've done, I point to a couple of things. The first is what I just described – all the content we're producing and our product priorities have changed dramatically, to be relevant to what customers are experiencing today. For example, the home business has been incredibly strong for us, as customers are spending more time there, and they're spending time cooking with their families, spending time working out at home, spending time working from home as well, obviously. And so the Omni process needs to be incredibly agile so that the content we're serving up and the products we're promoting are highly relevant.
And then on the back end, we’ve also made really important changes. We've done a lot of work, for example, in our call centers, to increase capacity and be sure we can handle all the orders that come through there. We introduced the drive-up service, and we’re incredibly proud of how the team essentially took what was a pilot that we had done in just a couple of stores and scaled it across the country in only two weeks. And, you know, that's really reflective of the agility that I think has been required for us and something we want to keep going forward as well.
Drive up service may be with us for a while, but it misses some of the serendipity that happens when a customer is in-store. How do you compensate for that?
That's a great point. Every sector is a little bit different. We've learned for groceries for example, that customers don't necessarily need to touch and feel all their produce like we might have thought they did. Now in apparel, there probably will be some customers that are perfectly comfortable buying sight unseen. But we do think it is a category where you want to try it on, you want to touch and feel the fabric, you want to see how it fits you, so we think it's highly likely the customers will go back to shopping in stores much as the way that they did before, but we'll be ready no matter what.
What type of trend or behavior have you seen during the pandemic that really surprised you?
I'd say one thing is how short a time customers were willing to be cooped up at home. I think many of us were thinking this was going to be a really long-term change in customer behavior. But what we're seeing is that once people begin to feel safe, they really do want to get out of the house, and they do want to go back to shopping again. And, so that's a very optimistic thing for the US consumer and our economy in general. And then I think the other thing is just how consumer behavior has changed so dramatically. We just had never seen that before. And, so I think that the companies that are able to really understand that and process that, and the marketers that are able to increase their agility for that will have even more success.
Marketing's role within organizations seems to have changed during the pandemic. Can you share any insights of how this has changed at Kohl’s?
The function itself has certain core capabilities that have always been important, but I'd say some of them are even more important than they've ever been. One concerns the stewardship of resources. Marketers have always had the onus on them to prove their ROI, and I'd say that is even more important now than it's ever been.
The second is about having the pulse of the customer. This has always been core – the best marketers are always able to understand customers in deep and unique ways. Through this crisis, we've really upped that capability within our organization. We have executive team meetings every week now, where we are going through customer data and social listening data, and we had not done that with that degree of frequency and intensity before. The company really leans into the marketing organization to understand what the customer wants, and how we can serve them better.
I'd also say the interconnectivity of marketing with the other functions is more important than ever. When it comes to things like HR – and health and safety being really important, marketing is there to make sure we understand what customers need in order to feel safe, so that's influenced our HR processes. And merchandising, what products should we buy? That's been a collaboration for a long time, but our merchants are even more looking at marketing to understand their assortments of products and so forth.
Are there any other processes that you've refined during this whole thing that you really want to make sure continue when this is over?
On work from home, we've had great success, unexpectedly great success with that. So one thing we've done is allowed our call center agents to work from home, which we've never done before, and that's a huge operational change for us and one we think is going to be helpful in attracting agents in the future, as well as allowing us to serve our customers more consistently. And then with regards to the marketing organization, we're thinking about what work from home means over the long term.
What type of information, data, do you find most lacking right now that would help you do your job more effectively?
By far the hardest thing is demand forecasting. We use this data to understand what our media mixes should be, among other things. We have the US upfront TV market coming up, and many of us are having to make some very big decisions with shiftier data than we've ever had.
The other thing is just any source of consumer buying and interest data. The social networks and Google have really stepped up here. The more we know where the consumer mindset is, the better.
Concerning the upfront, you obviously don't want to go wrong by buying either too little or too much, and with regards to the immediate term, we're tending to drive more of our media into things that can be increased or decreased more quickly. The big question we're looking at is holiday right now, and obviously we have the elections coming up. It's a critically important selling season for all of retail and that's where TV is a very important part of our mix. We know we'll be in TV, like we are every year. The question is just what's the right amount? And so we're working through those decisions right now.
What kinds of initiatives would you like the industry to focus on collectively right now?
I would be remiss if I did not raise the issue of diversity and equality in our companies and in marketing more broadly, as many of us are taking it on with renewed urgency. As a marketing team, we have had a heightened focus on our diversity and inclusion efforts in recent years, but we acknowledge this is not enough, and we need to do more.
Separately, the upfront structure has existed in the industry essentially since the beginning, and it creates a lot of challenges when we can't forecast demand, so it would be beneficial to the industry to find ways we can make that process more flexible, akin to the way that online ads have become so over time. It could be beneficial to the broadcasters as well. And then I think measurement is really important to tackle as an industry. Standardization of particularly digital ad measurement I think is really important across platforms.
What else can the marketing industry do together to emerge from this crisis stronger than before?
Collaborate more on best practices. That’s one of the great things that has come out of this, on so many of the calls that I've been on with other CMOs, and folks outside of the marketing community, is collaboration concerning how we can serve our customers and associates better and help our companies more. That didn't really exist before the crisis, so I hope that we can keep that up when we get into more normal circumstances.