Five years ago, it was hot Kohl’s, rewriting the face of retail with simple no-frills store layouts – one entrance, one floor, wide parallel aisles, checkout in the front. Everyone was imitating Kohl’s.
Five years later, the industry is about to walk on hot Kohl’s once again.
Kohl’s is still profitable and its double-digit same-store sales are above the industry average. But the company has received those kinds of kiss-of-death reviews that have store designers working into the night: Kohl’s president Kevin Mansell said customers told them: “You are easy to shop, but not exciting.”
The news that they opened 65 stores in one day in early October, their biggest single day in the company’s history, isn’t so much news. Everybody launches a lot of new stores in October and November. (Have you heard that Christmas is coming?)
The news is that before they got these stores ready to open, Kohl’s executives went on a nationwide search, visiting dozens of stores around the country, from urban boutiques to suburban malls.
Man bites dog! Now Kohl’s is doing the imitating.
Music plays at store entrances. Bedecked mannequins pose around the stores. Floor-to-ceiling graphics capture brand identities.
“The touches make the store more feminine,” says ceo Larry Montgomery. “Before, to be frank, we had a pretty masculine store.”
The feminine touches start with the merchandise. Kohl’s says it will now concentrate on the women-without-children market, a group with more time, more disposable income and more interest in fashion merchandise. (Also, no strollers. And no soccer players to pick up.) It contracted with Vera Wang to design a line of contemporary merchandise. It struck a deal with Liz Claiborne to introduce Stamp 10, a less-expensive version of the clothing brand Lucky. And it will carry cookware with the Food Network brand.
By the end of the year, exclusive national brands with familiar pedigrees will represent 8 percent of the chain’s sales, up from nearly zero several years ago.
This is in-your-face to rivals like J.C. Penney and Macy’s, who thrive on private labels. Kohl’s isn’t impressed. “What is I.N.C.?” asks Montgomery. “If you have not been in a Macy’s store, you have no idea.”
The redesigned space is more contemporary, with wide glass storefronts and mannequins facing the street. (Old Kohl’s stores are typically wrapped in cement or stone.) The spacious dressing rooms are furnished with contemporary leather couches and abstract art.
Remember when Kohl’s grocery-like cashwrap system was considered brilliantly if coldly efficient? Well, the new checkout areas have been redesigned to create a more personal face-to-face experience with the customer.
And Kohl’s has opened a design studio in New York. It’s an acknowledgement that fashion is an important opportunity, not just for Neiman’s and Saks. For a low-profile, middle-of-the-road Midwestern company, this is almost like saying it endorses Hillary for president!
Why are they doing this? The business is still thriving. But the business is also changing. Kohl’s executives said the mergers and consolidations of their competition might cause disruption.
May Co. stores are gone, especially familiar ones like Marshall Field’s in Chicago, Filene’s in Boston and Foley’s in Houston. Many have been renamed Macy’s, which could be confusing. If so, it’s a chance for Kohl’s to win over those middle-income consumers who used to spend $40 million a year in May stores.
It’s an open market. Penney’s ceo Mike Ullman has also spoken out about the chance to snatch former May shoppers who have not switched to the more upscale Macy’s brand.
The puck is being dropped. And Kohl’s, up in hockey-hungry Wisconsin, doesn’t lose many face-offs.