Kohl’s “Greatness Agenda” in action
In order to address its sluggish sales, Kohl’s Corporation (KSS) launched its “Greatness Agenda” strategy in the first quarter of fiscal 2014. Aside from the impact of lower discretionary spending, the company observed that consumers were spending less on categories where it held a high share, such as apparel, and more on categories where Kohl’s had a lower share like accessories.
In fiscal 2014, Kohl’s reported a 0.04% decline in its sales. Peers Macy’s (M), J. C. Penney Company (JCP), and Dillard’s (DDS) reported sales growth of 0.6%, 3.4%, and 1.3%, respectively, in fiscal 2014. Kohl’s performance in recent years was also impacted by the rapid growth of off-price retailers and virtual retailers.
Kohl’s aims to achieve $21 billion in sales by 2017 with the help of its growth strategy. Kohl’s Greatness Agenda strategy is built on the following five pillars:
- amazing products—launching products in exciting categories, leading in the active and wellness category, and creating unique assortments that are locally relevant (By the end of fiscal 2015, the company expects 40% of its sales to be transitioned to tailored assortments by store.)
- easy experience—focusing on providing better digital and in-store experience, launch new formats and distribution channels to increase sales. (We’ll discuss the company’s plans to open new store formats in Part 9 of this series.)
- personalized connections—building deeper connections with existing customers and attract new customers. (The company is focused on promoting its Yes2You Rewards loyalty program, which had 34 million members as of 3Q15.)
- incredible savings—providing value deals to customers.
- winning teams—building talented and results-oriented teams.
The portfolio holdings of the Vanguard Consumer Discretionary ETF (VCR) have 0.3% exposure to Kohl’s, and Kohl’s Greatness Agenda is showing a positive impact on the company’s performance. Now continue to the next part of this series, wherein we’ll discuss the improvement in the company’s same-store sales.