Five Billion Personalized Touches Help Kohl's Connect With Consumers

Kohl's Yes2You loyalty program, unveiled in October 2014, accounted for half of the retailer's Q1 transactions, according to CEO Kevin Mansell.

The program has grown from 10 million users last fall to 29 million by the end of 2015's first quarter, and those shoppers are transacting more frequently and with higher basket sizes than non-loyalty customers. "This is especially relevant as we saw a sizable decrease in shopping behavior for customers that are not part of the loyalty program," Mansell noted.

The department store is enhancing its behavior segmentation with shopper style, life stage and lifecycle data, and expects to have 5 billion personalized touches with consumers this year.

Part of those personalization efforts revolves around print advertising, with newspaper inserts tailored to the recipient. It generally doesn't make sense, says Mansell, for a shopper who buys men's clothes to receive a mailer filled with the Jennifer Lopez and Lauren Conrad product lines, for example.

It's still early days for Kohl's brand-new buy online, pickup instore (BOPUS) rollout but the move is gaining traction among shoppers. On some days, as much as 7 percent of the retailer's orders originated online and were fulfilled in store, said CFO Wes McDonald, saving $5 per box on average shipping costs. "The most difficult problem we have is trying to figure out the balance between where to host the inventory in the stores versus the EFC and where to fulfill the order," he added.

At this time, BOPUS is only available to customers shopping on PCs and laptops; it will be available on smartphones and tablets by late summer or early fall, which should lift adoption rates. "As you know, mobile traffic is what's driving the business," Mansell said. 

In Q1 Kohl's made several tweaks to its mobile experience, including its app which has been downloaded 7 million times. The retailer improved its webpages on tablet to be more search engine-friendly and added multi-select filters that boosted conversion rates and helped deliver more relevant recommendations. The company added voice search to its Android app, and image search to both the iO and Android applications. "The pace of development will actually accelerate in the second and third quarter across the mobile platform," Mansell added.

Denim, a category which has been on the decline for many retailers, is beginning to rebound at Kohl's, even as activewear sales accelerate. "An improved trend in denim is really a good signal for what could come for back-to-school," said Mansell, who described the category as a "transaction influencer" with a relatively high AUR.

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