Kohl’s: Finding Balance with E-Commerce
In an interview last week, Kohl’s COE Kevin Mansell told CNBC that the retailer believes they have found a way to strike balance between brick and mortar and the growing trend of online shopping.
Kohl’s currently has twelve locations in the U.S. that are approximately 35,000 square feet, compared to the more than 80,000 square foot of other Kohl’s stores. The hope is that smaller locations, are less to operate and they will keep only the top-selling inventory on the floor, allowing Kohl’s to be more adaptable and open in new markets.
Close to 500 of it’s largest locations will be trimming back on space and looking for opportunities to co-occupy space with other large retails, grocery stores and fitness centers.
“An average full-size Kohl’s store is doing fifteen percent less business than it did five years ago,” outgoing CEO Kevin Mansell told CNBC Tuesday during a tour of a small-format Kohl’s store in East Windsor, New Jersey. “That was really the problem to solve for us. … Smaller is going to be better. Bigger is not.”
The smaller stores will have about sixty percent less space, and inventory but the build-outs are much less intensive, and merchandise will be curated to meet the needs of the local consumer.
“It’s a different beast” to operate smaller stores, Mansell said. But “we think we have a big idea.” And the next “natural evolution” for the 35,000-square-feet locations will be to move into more urban markets where a massive footprint wouldn’t fit, he said.
Additional changes include increased technology. With more purchases happening online, Kohl’s has a pilot program they have launched which could expand to their other locations if its successful. This includes mobile checkouts, portable scanners conveniently located throughout the store for price checks, and employees equipped with iPads with more tools to assist shoppers.
Kohl’s focus for 2018 will be focused on finding the “right-size” for its larger stores, carefully selecting from their 500 locations, which ones will be the best fit for new retail partners. As many as ten stores have already begin this process – which includes sharing space with retailers like Aldi and Ross. The idea is to drive incremental traffic with these retail partners, so long as it lures shoppers to the center.
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