Kohl's CEO Michelle Gass hopes for an Amazon-ian boost to Black Friday/Cyber Monday
Kohl’s CEO Michelle Gass hopes for an Amazon-ian boost to Black Friday/Cyber Monday
Tue, 11/26/2019 – 03:42
- Kohl’s heads into the Holiday season on the back of a nationwide roll-out of its Amazon returns tie-up. It’s an alliance that’s delivering new and younger footfall in-store, says CEO Michelle Gass.
Every US retailer is bracing itself for Black Friday/Cyber Monday and focusing on providing the strongest incentives to lure shoppers in store or online after their Thanksgiving dinners. For Kohlâ€™s this holiday season has a new feature which CEO Michelle Gass is looking to with anticipation – the first one where the brand will be offering in-store Amazon returns nationwide.
As noted previously, Kohlâ€™s has been one of the most enthusiastic proponents of finding ways to co-operate rather than compete with Amazon, piloting a scheme to allow buyers to bring unwanted goods purchased on the online platform into the local Kohlâ€™s store where the returns process will be handled without the need for a trip to the mail office.
And from Kohlâ€™s perspective, once that Amazon customer is inside the store the trick is then to incent them to look around and make purchases rather than just dump their returns and leave. That theory has played out well in the pilots and the first half of this year has seen the rollout of the scheme to all Kohlâ€™s stores across the US.Â Gass says:
With the extension of the program, consumer research indicates that customers are very satisfied with the service. They find it simple and easy to us and they intend to use it again. The program is driving incremental traffic into our stores and we are particularly encouraged by the disproportionate amount of new customers, which on average are also younger than the typical Kohlâ€™s customer.
She adds that pulling in these younger customers aligns with the retailerâ€™s strategic priorities.Â But having got them through the door, the trick then is to get them to get their wallets out. This is a work in progress, says Gass:
Our conversion rate for people coming in who are shopping is also very consistent with what we saw in the pilot, which when you net that all out for the year will be accretive to our profitability. But we’re not stopping there and we have a lot of focus, we see the tremendous opportunity to drive even further conversion. So we’re doing things like enhancing training for our associates, we’re testing different offers, and we’re adding incremental merchandising opportunities right in the area where the Amazon returns are accepted.
So my hope is that we can drive that conversion even further, but it is today, meeting expectations. I do think whatâ€™s really importantly too is that the way we’re doing it is hitting the bar of both Kohl’s, and Amazon in terms of the customer experience. We are very pleased with that. I We’ve done statistical surveys, and the customer is very satisfied with the program. They see it as simple and easy, which is intentional, and importantly, they intend to use it again. So very happy with that.
Away from the Amazon relationship, Kohlâ€™s is also doubling down on digital with some notable success stories. Use of the Kohlâ€™s mobile app has accelerated and accounts for the highest proportion of digital sales. Buy Online, Pick-up In-Store (BOPIS) and Buy Online, Ship to StoreÂ (BOSS) programs are also ramping up for the Holidays with 95% of BOPIS orders available for collection within one hour.
The firm is also looking to digital channels to bolster customer outreach and engagement:
We continue to leverageÂ digitalÂ media more extensively and more efficiently to reach customers where they are. As an example, we completed our effort to bringÂ digitalÂ search in-house. And we’re partnering with Google to increase the use of machine learningâ€¦We have also significantly increased our use of social media to reach both our core and younger audiences.
We began piloting a new site experience to elevate the customer experience, including more product storytelling, more personalization and better search capability, while also continuing to deliver a strong value message. While it’s early days and we’re only testing a small portion of our traffic we’re seeing good engagements. Based on the results we will look to further expand the pilot to a greater portion of our traffic early next year.
Another promising initiative is Curated by Kohlâ€™s, pitched by Gass as a platform to â€œshowcase emerging digitally native brandsâ€� in partnership with Facebook:
We launched it last month in about 50 stores and online and are encouraged by the early results. We’re partnering with Facebook to bring Curated to life through social marketing efforts and to help identify brands that are creating a following on both their Facebook and Instagram platforms. We look forward to bringing new brands onto the platform next year.
All told, as she braces for the hoped-for uptick in demand this weekend, Gass is upbeat about Kohlâ€™s position in a retail market that has been racked with turbulence and uncertainty this year:
We’re at a really unique time at the company. With all of our initiatives, all the innovation, the new brands, the traffic we’re seeing for Amazon returns, it’s really important that we capitalize on this moment and drive market share and customer acquisition.
Part of that, with commendable omni-channel savvy, will still involve a solid focus on the physical stores:
People are still building stores even in this environment. For us, especially given our omni-channel reach, the intent would be to find places where we can build these small footprint. What we do know is when we do have a presence in the neighborhood that that also helps drive ourÂ digitalÂ businesses as well.
And thatâ€™s the omni-channel balance that eludes so many retailers today.
As with all retailers, we need to wait to see the Black Friday numbers come early next week, but Kohlâ€™s is going into this Holidays season in better omni-channel shape than it did last year – or indeed earlier this year when it was blaming bad weather for poor numbers – and considerably better positioned than some other major retail brands.
I listened in some disappointment to The GAPâ€™s quarterly analyst call this week, the first since the dramatic departure of former CEO Art Peck. The cursory references to digital investment and omni-channel strategy were in stark contrast to Peckâ€™s tech evangelism, although given the precarious position The GAP remains in, perhaps his techno-enthusiasm went too far at the expense of practical results?
Kohlâ€™s was one of the first retailers where the â€˜love the storeâ€™ mantra could be seen in evidence, dating as far back as previous CEO Kevin Mansellâ€™s regime. The Amazon alliance, as noted previously, is pragmatic and not the â€˜sleeping with the enemyâ€™ move that some retailers seem to believe such tie-ups to be (Hi, Nike!). That said, thereâ€™s still a need for more digital â€˜sparkâ€™ at Kohlâ€™s beyond doing the tick-box stuff like mobile apps and BOPIS initiatives. More of that in 2020 would be encouraging to see.
Image credit – Kohl’s/Amazon