Kohl's Reducing Floor Space In Physical Stores And Turning Digital
By Christine Kern, contributing writer
Overhaul would reduce floor space for products in almost half its stores and boost digital offerings.
Kohl’s department store chain has announced that it will be overhauling approximately half of its physical stores in order to reduce floor space for products and boost its digital offerings as a means to better compete with Amazon and other fashion retailers. Experts have already noted that the American retail marketplace is seriously over-stored, as Retail Insights reported, causing continued downsizing of retail chains nationwide. To date, Kohl’s has managed to avoid store closings, but now is taking a new approach to its retail brand by reducing the size of its average brick-and-mortar locations to be “operationally smaller” at approximately half of its retail locations.
In a company statement, Kohl’s stated, “By optimizing and rightsizing stores based on customer and inventory needs, Kohl’s stores are able to operate more efficiently and provide a more engaging customer experience.”
The overhaul means a reduction in the amount of inventory on display as well as fewer fixtures located on the sales floor. The strategy is also part of a larger, ongoing inventory reduction and management initiative through which Kohl’s is determining needs at stores nationwide to better target merchandise, according to the Milwaukee Journal Sentinel.
“Our stores remain at the core of our omnichannel strategy and we will continue to invest in them by opening smaller formats, rightsizing and optimizing our selling space and working to ensure that shopping in our stores is an engaging and inspiring experience for our customers,” asserted Kevin Mansell, Kohl’s chairman, chief executive officer and president. Jen Johnson, vice president of communications for Kohl’s, explained that the plan is for stores to become smaller through right sizing in the future. The approach means having smaller stores without impeding customer purchases.
The redesigned stores will follow the example of the newer small format stores, which are approximately 35,000 square feet. Kohl’s first announced plans for smaller stores in 2015, and opened 8 of the small format stores in 2016 with plans to open four more this October.
Kohl's sales fell in the second quarter, earning $208 million in the three months that ended July 29. In response to the Quarter 2 figures, CEO Kevin Mansell said its brick-and-mortar stores are increasingly vital in fulfilling online orders.
The company is ramping up its online fulfillment capabilities by opening its fifth distribution center. The 937,000-square-foot e-commerce fulfillment center in Indiana will start shipping orders this month. The other four fulfillment centers are in California, Maryland, Ohio and Texas. All retail stores also fulfill and ship orders made online.
Mansell said, “We have set a goal to be the best-in-class omnichannel retailer and opening our fifth e-commerce distribution center will support the delivery of online orders faster and more efficiently to customers nationwide.”