Kohl’s has struggled to find an identity in a quickly changing retail world.
It simply takes more effort to get people to leave their homes and visit a store. Kohl’s (KSS) has tried to address that by giving customers more reasons to visit.
Those have included things like taking Amazon returns and adding Sephora stores to many of its locations.
Ashley Buchanan, who served as CEO of Michaels and top jobs at Walmart’s Sam’s Club and Walmart itself, took the helm as Kohl’s CEO in mid-January. He hit the ground running and shared his evaluation of the retailer during its fiscal-fourth-quarter earnings call.
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“It is very clear to me that Kohl’s is built on a solid foundation that includes operating more than 1,100 conveniently located stores nationwide, serving over 60 million customers with 30 million of those customers being Kohl’s loyalty members,” he shared.
That has encouraged the new CEO, who says the Menomonee, Wis., company is on the right path.
“With this foundation in place, Kohl’s has tremendous opportunity to build on our strengths, address key areas of opportunities, and better serve our customers more consistently every day,” he added. “Kohl’s customers expect great product, great value, and a great experience.”
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Kohl’s CEO spots a problem
While Kohl’s needs to change to grow its customer base, Buchanan understands that change comes with risk.
“Over the past few years, we have implemented a significant amount of change across our assortment, value strategies and store experience in an effort to attract new customers,” he said.
That has largely been a positive, but the CEO also explained how it can be a problem.
“While the intention of the strategy to engage a new customer has been important, it has also caused friction with core customers,” he shared.
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Buchanan says the needs of both new and old customers can be met.
“We need to reprioritize our initiatives to deliver on these key tenets to better serve all of our customers, both new and existing,” he said. “When examining recent performance, we have fallen short of fully delivering what our customers want and expect from Kohl’s.
“Most of what we need to do is in our control and can be achieved by setting a clear vision and holding ourselves accountable to executing at a higher standard.”
Kohl’s has a big hill to climb
While Buchanan understands the problem, he also makes clear that fixing it will take time.
“As you will see from the financial guidance we’re giving today, I want to set the expectations that this turnaround, while very achievable, is going to take some time,” he said.
“Progress starts with the actions we are taking in 2025 to address opportunities and better serve our customers. This marks the initial phase of actions from our ongoing assessment. Let me now discuss a few areas of focus.” They are:
- First, offer a curated, more balanced assortment that fulfill needs across all customers.
- Second, reestablish Kohl’s as a leader in value and quality.
- And third, deliver a frictionless shopping experience.
Neil Saunders, managing director of GlobalData’s retail division, outlined his thoughts on Kohl’s situation on RetailWire.
“Kohl’s has lost 1.3 million customers over the past five years. So, a good start point would be to understand why those people defected,” he wrote. “When we look at our data there are some clear priority reasons: assortments not being relevant, hard to shop stores, poor value for money, and a lack of interesting products.”
Saunders sees the company as needing a lot more focus.
“What Kohl’s is doing right now is throwing a lot of product out there without a central vision of who the customer is and what they want. That isn’t enough to differentiate against rivals. It isn’t enough to excite the consumer. And it isn’t enough to make Kohl’s a destination,” he added.
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Jeff Sward responded to Saunders with a very specific challenge for Kohl’s.
“What near-term fix does Kohl’s need? A personality. A brand promise that offers some kind of distinction and differentiation. Product curation that gives people a reason to drive past Target and shop [at] Kohl’s. Maybe a series of high-profile collaborations,” he wrote.
