Whether you’re trying to find new clothes or looking to spruce up your home, Kohl’s is a popular shopping destination for millions. But that doesn’t mean the retailer isn’t looking to bring more customers in. Kohl’s has taken on initiatives to attract new shoppers in the past, like a partnership with Amazon in 2020 for an in-store returns service. And now, the company has announced a new venture that it’s hopeful will service existing customers while also bringing in new ones. Read on to find out what Kohl’s is doing now.
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Kohl’s shoppers might be used to the traditional brick-and-mortar stores, but the company just announced it is planning a new retail format. According to CNBC, the company is set to start opening more than 100 smaller-format shops over the next four years. Michelle Gass, Kohl’s chief executive, told the news outlet that these miniature stores will be about 35,000 square feet on average compared to the around 80,000 square feet a typical Kohl’s store can span. The first of these shops will be tested in the Seattle area but it has not yet been announced when it will open.
According to CNBC, Kohl’s is currently being pressured to consider a sale, so the company is adapting to help investors see how it’s making progress on its own. Shares of Kohl’s slipped more than 8 percent recently. Gass said that the smaller stores will be a bid to attract new customers and lure in younger shoppers in particular. Kohl’s currently has a portfolio of 65 million customers.
“This year is a big year for us,” Gass told CNBC over the phone. “The framework that we’ve put out there for investors … it’s a very thoughtful guide for us.”
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The company is also hoping to change customer mindset from viewing Kohl’s as being on par with mall-based department stores that are focused on women’s apparel and home goods. Instead, Kohl’s wants to be known as a go-to destination for athletic apparel like sneakers, hoodies, and leggings, from a range of popular brands such as Nike, Adidas, Champion, and its own FLX label, CNBC reported.
“We’re evolving our position from a department store to a more focused lifestyle concept, centered around the active and casual lifestyle,” Gass said during a March 7 investor meeting. “This is unique and we can own this space.”
Active merchandise accounted for about 24 percent of Kohl’s total revenue in 2021—a large jump from the 14 percent it accounted for in 2016. “I think we can all personally relate to this,” Gass explained. “While you may dress up a bit more than you were when you were taking a Zoom call from your home office, you may still want to wear sneakers into the office versus dress shoes. This creates big opportunities for Kohl’s.”
Kohl’s isn’t looking to abandon other sectors, however. The company is still hoping to significantly grow its women’s dress business, expand outdoor and swim wear, and broaden its selection of inclusive sizes, according to CNBC. Kohls CMO Doug Howe said that the retailer will be testing “dress destinations” in some stores to also increase interest in dresses and other women’s apparel items that aren’t activewear.
The company is looking to make the check-out process easier for customers in stores as well. Kohl’s said it will be rolling out a self-service “buy online, pick up in-store” option to all of its locations this year, as well as continue to test self-service returns and check-out offerings, CNBC reported.
“Make no mistake, this is a transformation,” Gass said during the investor meeting. “It is a complete reinvention of our business model and our brand.”
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