Kohl's Goals: Localized Assortments, Smaller-Format Stores

Calling assortment planning "probably the biggest initiative we have in the next two years," Kohl's CEO Kevin Mansell revealed during a recent conference call that the department store retailer would be rolling out a new assortment planning tool with "our technology partner SAS.

"We've talked at length about the need to improve how we tailor our merchandise more appropriately by market so that it's on target to the customer that lives in that market," he added. "A lot of that has to do with having the right tools for our merchants and planners to use so that job becomes easier for them."

Kohl's is also part of the recent retail movement toward smaller store footprints that includes Best Buy, Staples, Office Depot and Cabela's. "Approximately 75% of the new stores that we opened in 2011 were small stores, with less than 64,000 square feet of retail space," noted Mansell. "We also completed the remodel of our 100th store during the [third] quarter. Not only do these remodels result in a fresh and pleasant shopping experience for our customers, they also result in higher customer satisfaction scores and payroll productivity improvements."

Mansell added that Kohl's plans to remodel another 100 stores in 2012 and to open approximately 30 stores, and that "90% of these stores will be small stores."

While Kohl's will be taking up less physical space, the retailer is living large in the digital space: "Our e-commerce sales year-to-date have surpassed $0.5 billion and remain on target to reach our goal of $1 billion," for the fiscal year, said Mansell. "During the quarter we opened our third e-commerce fulfillment center, a 1 million-square-foot facility in Maryland. We are planning a fourth fulfillment center in Texas, which we expect to open in the summer of 2012."

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