- Kohl’s is being hailed as a winner of the retail apocalypse as other department stores like Sears struggle.
- Comparable sales were up 2.5% at Kohl’s in the third quarter.
- Part of why it’s doing so well is thanks to the changes it’s making to stores, like adding pickup lockers and selling Amazon devices.
- We visited Kohl’s and saw why it has been so successful lately.
In November, Kohl’s reported that comparable sales were up 2.5% in the third quarter of 2018. Meanwhile, other department stores like Sears and JCPenney have been struggling through crippling sales declines.
One major advantage that Kohl’s has over other department stores is that nine out of 10 Kohl’s stores are in suburban strip malls rather than enclosed shopping malls, so it isn’t as strongly effected by declining foot traffic to malls. Kohl’s has about 1,100 stores.
The low-price department store has also been benefiting from a disappearing middle class and a higher demand for budget options – two factors that have been hurting more high-end department stores.
Kohl’s has been making some major changes to its stores. In March, the company announced a plan to bring the discount grocery chain Aldi to 10 of its stores in a pilot test.
“This quarter, we launched two pilot stores where we are testing a new customer service center concept, that includes a centralised checkout, a new impulse merchandising approach, self-checkout, new self-service kiosks and buy online, pick up in-store lockers,” CEO Michelle Gass said in the company’s third-quarter earnings call.
The department-store chain has also expanded its partnership with Amazon and is now accepting returns from the e-commerce giant in about 100 stores. Kohl’s has tripled the amount of Amazon pop-up shops inside Kohl’s from 10 to 30 stores, and it will continue selling Amazon-branded products in all stores to help drive traffic.
We visited a Kohl’s store in Jersey City, New Jersey, and saw for ourselves why the retailer’s changes are helping it thrive:
Unlike most Kohl’s stores, the location we visited in Jersey City, New Jersey, was in a shopping mall.
Menswear was at the front of the store. Kohl’s carries name brands like Under Armour, Adidas, and Nike in its stores.
Kohl’s prices are generally inexpensive to begin with, and many products in store were on sale.
Products throughout the store were as much as 50% off, appealing to budget shoppers more than other high-end department stores.
The menswear department took up a little less than half of the first floor. Everything was very neat and organised throughout the store, and it never felt cluttered.
Near the menswear department were accessories like handbags …
… and the beauty department.
It was similar to that of any other department store, but the products’ prices were on the lower end.
The women’s department was on the other side of the makeup. It carried sportswear from brands like Adidas …
… Levi’s jeans …
… and a ton of other brands for under $US40.
There was also a big clearance section offering as much as 80% off certain products, along with deals like buy one, get one half off.
Upstairs, there was a huge children’s department …
… which included a recently remodeled toy department. Like many other retailers, Kohl’s is trying to win over sales from former Toys R Us customers.
The toy department — which was about half the size when we previously visited this store in March — had a small branded FAO Schwarz display, as well as other popular toys like Hatchimals and LOL Surprise.
Near the toy department, there were shoes …
… and bedding.
The electronics department had recently been remodeled as well. It sold video games, speakers …
… headphones …
… Apple products …
… and Amazon devices like the Echo Dot.
This particular location does not accept Amazon returns. Near the customer service desk, I found new pickup lockers for online orders, encouraging shoppers to shop online and pick up in-store.
Shopping at Kohl’s, it was clear why the department store is thriving as other department stores struggle.
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