Kohl’s 16 Million App Users Unlock Digital Surge, New Focus

Kohl’s focus on digital—including rolling out Amazon Returns and updating its website for younger demographics—is turning into strong results.

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Need to Know

  • Kohl’s digital sales grew by double digits during the retailer’s latest quarter, and represented 25% of overall sales.
  • Mobile shopping and the Kohl’s app are Kohl’s biggest growth drivers, accounting for 75% of traffic and more than 50% of digital sales.
  • Over 16 million people downloaded and used Kohl’s mobile app in 2019.
  • Kohl’s partnership with Amazon on its Returns program is driving great foot traffic for Kohl’s brick-and-mortar stores.
  • Kohl’s digital transformation is looking to target a younger demographic than its current average customer, who is between 35-55 years old.

Analysis

Michelle Gass, Kohl’s CEO, is encouraged that retailer’s Q4 2019 earnings beat analyst estimates in the current climate, but is looking towards the future with even bigger plans.

Part of Kohl’s strategy involves targeting a younger demographic where they like to shop best: online. 

Gass says, “Mobile and the Kohl’s app continued to be the primary drivers of growth together accounting for 75% of traffic, and more than half of our [digital] sales. I am especially pleased to see our efforts in driving app adoption paying off. For 2019 we had a record number of active app users approaching 16 million. Relative to the industry this level of app engagement is best in class, and it’s translating into higher conversion and spending.”

Only 31% of Kohl’s in-store customers are in the 18-34 demographic, and its current biggest range is 35-55 year olds. Less than 29% of customers are six-figure earners, but over 50 million people belong to the Kohl’s loyalty program, which has been continuously updated over the years to become more personalized and engaging for millennials.

The company has been innovative with its brand partnerships (POPSUGAR, Adidas, Amazon) and its loyalty program in attempts to increase online and brick-and-mortar sales.

Kohl’s Amazon Returns program allows customers to return items purchased on Amazon from Kohl’s without the original packaging and without an extra fee. The retailer will then package it and send it back to an Amazon return centre.

Gass says, “We’ve seen sequential improvement and traffic in our stores following the nationwide rollout [of Amazon Returns]. We continue to see increased levels of new and younger customers. Our store associates deliver an exceptional customer experience validated by a world-class net promoter score with this program.”

Four-fifths of customers who were returning Amazon merchandise shopped in the store after the initial transaction, increasing foot traffic, time spent in-store, and ultimately, sales.

Not only is Kohl’s partnerships driving more traffic and sales, but its digital transformation—including a new website experience—has been shifting brand messaging and channels towards the retailer’s target clientele.

“We launched our new site experience following a successful pilot over the holiday period,” shares Gass. “The goal of the new site experience is to provide greater inspiration and storytelling around our products, while continuing to drive our value message. Importantly, we’ve significantly enhanced our capabilities around filtering, personalization and search.”

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