Dive Brief:
- Kohl’s wants to win back its most loyal customers by strengthening its core experiences, simplifying its promotions and improving its omnichannel offerings, executives said on a Q4 2024 earnings call Tuesday.
- The retailer’s coupons and promotions have become confusing, largely due to a growing list of excluded brands, according to CEO Ashley Buchanan. The company is reducing the number of exclusions to simultaneously improve value and experience.
- Kohl’s is pursuing more consistent experiences across channels by ensuring in-stock listings online match what’s available in store and increasing in-stock rates for high volume items, according to Buchanan.
Dive Insight:
While Kohl’s has a loyal customer base, the company is making it “a little bit” hard for them to love the brand, according to Buchanan, who took on the role in January. A simpler, more reliable experience could help win back business.
If customers truly find Kohl’s tough to love, it’s reflected in the retailer’s results. Same-store sales fell 6.7% year over year in the fourth quarter of 2024, according to an earnings release. Net sales declined 9.4% year over year to $5.2 billion during the quarter, while net income dropped 74% year over year to $48 million.
While Kohl’s has its initial turnaround plan in place, Buchanan admitted the company has a long road ahead.
“I want to be realistic in how we are setting our expectations,” Buchanan said during the call. “My full review of the business and go-forward strategy is still ongoing. The actions we are taking in 2025 are a step in the right direction, but there's more work to be done to unlock the full potential of this company.”
One of the brand’s pitfalls was reducing the footprint of its jewelry sections to make room for Sephora store-in-stores, according to executives. The partnership is a powerful customer acquisition tool, but the reduced jewelry selection alienated some shoppers, and a great Sephora experience doesn’t necessarily highlight what the rest of the store has to offer.
“We did bring in a lot of new customers,” said Jill Timm, CFO at Kohl’s. “Obviously, Sephora was helpful from that perspective, and we're driving those customers into our loyalty program. But we really need to establish that we have a great experience when they come to the store.”
Kohl’s wants to optimize its store layouts, according to Buchanan. The company plans to analyze productivity and adjacency between brands while putting relevant product categories near each other to enable better discovery and smoother shopping experiences.
The retailer will leverage technology to improve the synergy between in-store and online experiences, according to Buchanan. He said that it’s too early to share details but noted “the goal of all this work is to make shopping at Kohl’s a more enjoyable and reliable experience.”
