In what’s expected to be a challenging holiday season, Kohl’s Corp. is striving to reverse negative sales trends and emphasize its positioning as a family destination.
The Menomonee Falls, Wis.-based promotional retailer has beefed up its 2024 holiday assortment with nearly twice as many gift options compared to last year, according to senior executives who discussed the strategy on Thursday.
Kohl’s stores are set to have twice as many Sephora at Kohl’s gift sets as a year ago. Babies R Us shops have been set up in 200 locations for the first time this holiday, providing a new assortment of baby gear. And seasonal decor has been expanded by 50 percent and has front-of-store positioning.
Nick Jones, chief merchandising officer, said holiday-related merchandise runs throughout the store, across several categories, although not at the expense of items shoppers can pick up for themselves.
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“We really pushed hard making sure we have more gifts for the whole family,” said Jones, adding that Kohl’s also put “a real emphasis on building momentum in growth areas” such as Sephora and dresses. “We have gift sets not just through beauty but also in home, men’s, women’s and kids’. We are trying to make sure there’s great product and great value while leaning into convenience so families are set for the holiday.”
This holiday, customers can use Instacart to shop Kohl’s and get same-day delivery, or pick up in stores those items ordered on Kohls.com.
Jones said Sephora has been expanded to 1,050 Kohl’s doors, and added that rolling out Babies R Us shops this year has been “a big step,” in attracting families and that the brand’s registry recently went live at Kohl’s.
Kohl’s now has dress areas — with more festive, special occasion styles displayed up front — in all 1,100 stores for holiday, up from 700 dress shops in the summer. Key brands include Harper Rose, Andrew Marc, London Times, Taylor and Maison Taylor while private dress brands include Lauren Conrad, Simply Vera Vera Wang, Nine West and Draper James.
Elsewhere on the selling floor, Kohl’s is introducing a number of brands to its customers for the holidays, including Aéropostale, Hurley, Quiksilver, Limited Too, Tahari, Catherine Malandrino and Buffalo.
Kohl’s has also stocked 50 percent more holiday cards, and shoppers will also find a deeper selection of pet, tech and electronics, personal care and wellness, kitchen electrics and novelty gifts.
The selling floors suggest executives are betting on customers buying items they may not have intended to when they first walked into the store. They’ll notice a larger presentation of “impulse” items, particularly along the queue lines for checkout that were recently set up in 440 Kohl’s locations. The remaining 800 or so stores have the long-established central checkout format.
“We got more impulse items in more stores,” said Fred Hand, director of stores. Stocking stuffers, candy, potato chips, drinks, chargers, travel-sized beauty items from Sephora, Apple accessories, and ornaments for the tree, are a big part of the impulse assortment.
“It’s instant gratification, not necessarily what you are looking for originally,” Hand said.
Even Christmas trees are taking up more space compared with last year, said Christie Raymond, Kohl’s chief marketing officer. “We’re calling it, ‘The Tree Farm.’”
Kohl’s holiday campaign launched the first week of October, overlapping with the Halloween marketing and merchandising. Raymond said the timing was no different from last year.
Raymond also said that the company is “leaning into Kohl’s Cash heavily by elevating its marketing” this year. She said more $15 for $50 days are planned, which means customers can earn a $15 Kohl’s Cash coupon redeemable for merchandise, for every $50 spent. Typically, customers are entitled to a $10 Kohl’s Cash coupon for every $50 spent.
Kohl’s Cash has been a central promotional strategy at Kohl’s since 2001 and has been successful in building customer loyalty. The $15 for $50 Kohl’s Cash deal will return in early November. On Black Friday, Kohl’s will kick off a series of in-store events, sweepstakes and giveaways that will run through December. Once again, the retailer will be closed on Thanksgiving Day.
Last month, Kohl’s introduced a new brand platform, Where Families Come First. According to Raymond, it continues during the holiday season. Rather than depicting perfect or sentimental family moments as many retailers do in their advertising, the current Kohl’s messaging “flips the script” and depicts “real moments” like middle-of-the-night wake-ups by the baby.
Asked if people are shopping for holiday gifts earlier this year, Raymond said that so far, “It doesn’t feel dramatically different.”
For Kohl’s and other U.S. retailers, the holiday season is expected to be challenging and complicated by inflation, the nation’s divisive politics and warfare overseas. A lot can happen around the world in the weeks leading up to the holiday.
Also, the calendar isn’t favorable for retailers, with only 27 days for shopping from Thanksgiving to the day before Christmas — the fewest since 2019 — compared with 32 last year. But that may not be as bad as it sounds. The shorter calendar would make the latter part of November more important, and should compress the lull that usually occurs after the immediate post-Thanksgiving rush.
Currently, industry expectations for 2024 holiday sales gains are modest, with sales gains of only 2 to 3 percent. Kohl’s would take that. When the retailer reported that its second-quarter comparable sales declined 5.1 percent, chief executive officer Tom Kingsbury said: “We have taken significant action to reposition Kohl’s for future growth. However, our efforts have yet to fully yield the intended outcome due in part to a continued challenging consumer environment and softness in our core business. During the second quarter, our customers exhibited more discretion in their spending, which pressured our sales even as customers transacted more frequently. This overshadowed strong performance in our key growth areas, including Sephora, home decor, gifting and impulse. In spite of this, we continued to execute well operationally, enabling us to deliver a 13 percent increase in earnings driven by gross margin expansion and strong inventory and expense management.”
For the fourth quarter last year, Kohl’s reported a 4.3 percent decline in comparable sales, but the comps were brought down by the e-commerce business, while the stores showed improvement. Despite the sales decline, Kohl’s in the fourth quarter moved into the black, indicating that the company is successfully managing inventories and expenses, while also increasing its cash flow and reducing debt.
Asked if Kohl’s will be any more promotional for holiday, Raymond said: “We know people are feeling stretched. Promotions are very important for holiday. We consistently have a really strong promotional calendar and really compelling pricing. We are being very responsive.”
