Kohl’s pursues the forgotten Millennials to avoid the fate of Sears and Macy’s.
Hoping to avoid the same fate of competitors Sears and Macy’s, Kohl’s has been investing in new ways to attract and keep millennial shoppers coming to its online and physical stores. In February, Forbes revealed that the department store suffered a weak holiday quarter in 2015, responding with job cuts to help offset lower than anticipated sales. The real problem, however, was its shoppers: while Kohl’s has cultivated a unique customer base comprised of the ultimate bargain hunters, they have failed to entice the millennial crowd.
Prosper’s Shopper Preference Share Composite Index for Kohl’s (which includes apparel, shoes, toys, and home categories) indicates that the department store has been floundering with shoppers overall (adults 18+) for the past few years after expanding nationally in the early 2000s, but the real loss is among those between the ages of 18 and 34: the millennials. (The Shopper Preference Share Composite Index is derived from Prosper’s monthly retail preference share questions, which are unaided, write-in questions posed to consumers in an online survey.)
And the loss of millennials is crucial because they outspend their over-35 counterparts by about 30 percent in the softlines categories, figures that could make or break a retailer in today’s competitive marketplace.
Enter the k/lab.
"Our focus is really on the family, so this is focusing on the family member we kind of forgot about — the millennial, who is still part of that family." Sofia Wacksman, Kohl's vice president of trend, told Business Insider.
The new initiative launched November 14, targeting the urban, style-conscious millennial, and offering fast-fashion options. Business Insider said that this new innovative offering is designed to be more reactive, with an emphasis on the speed of delivery from design to store, not seasonally-dependent.
The goal of the k/lab is to target and attract millennial women, who are currently not their core customers. The idea is to win over new customers who might not have shopped at Kohl’s before, but who want to check out the new collection.
Prices for items in the new collection are expected to range between $28 and $78 and the stock will be more fluid and change more rapidly than traditional Kohl’s lines. k/lab items will be displayed separately in-store in ways that are designed to stand out and attract the eye. The collection launches at 21 stores nationwide, predominantly in cities with larger millennial populations.
Kohl’s has been consciously reinventing itself to help boost sales. Last month, the department store announced that it was launching Kohl’s Pay nationwide, integrating the Kohl’s Charge private label credit card into the popular Kohl’s mobile app. Millennials are most likely to use mobile payment methods, so perhaps this will bode well for the new k/lab line.
In September, the retailer also opened a new e-commerce distribution center to help support omnichannel fulfillment. Sona Chawla, Kohl’s chief operating officer, explained, “We are committed to providing an easy experience to Kohl’s customers and a key part of this is being able to deliver amazing products to them more quickly and efficiently. The new e-commerce fulfillment center will be in place to support the holiday season in 2017.”
"Whether [k/lab] works or not, for me, is less relevant. It's teaching us new skills and new tools on how we can approach the business," Michelle Gass, chief merchandising and customer officer for Kohl's, told Business Insider. "It's helping us think differently, so it's already is a success in my mind."
