Kohl’s Goes Big on Small Format in New Store Experience Investment Program

Kohl’s is launching a store experience investment program that will include opening 100 small format stores in previously untapped markets.

Over the next three years, the department store retailer will increase its investment in store strategies to improve the store experience for customers and associates, it said, and over the next four years, about 100 new, smaller format stores will open in markets where Kohl’s has no physical presence.

“Kohl’s began with roots as a brick-and-mortar company, and these 60 years of experience have set the company up to become a leading omnichannel retailer,” said Mark Griepentrog, Kohl’s chief property officer. “Our strong and productive off-mall store base can continuously evolve with our customer’s expectations and demand, and we see substantial opportunities to leverage our real estate in producing long-term growth.”

The expansion of the small format stores follows a successful pilot of over 20 smaller stores. The average Kohl’s store of around 80,000 square feet is too large for many small markets. By introducing these smaller format stores, most at approximately 35,000 square feet, Kohl’s will enter new neighborhoods while also providing a hyper-localized experience to cater to the community’s needs.

This June, Kohl’s will open a brand-new store in Bonney Lake, WA, and in the fall, four additional new small format stores will open in San Angelo, TX, Morgantown, WV, Tacoma, WA, and Lenox, MA. Kohl’s is using information technology to create a highly-localized experience in these smaller stores such as catering the new Tacoma store’s merchandise toward the active lifestyle customer in that market by offering a more focused assortment of outdoor gear.

The retailer is also modernizing its stores overall to provide customers with features that offer convenient services, opportunities for discovery, and an overall inviting experience, it said. By 2023, Sephora at Kohl’s will be introduced to 850 locations, reflecting a new and more modern Kohl’s (the five previously mentioned small format stores opening will be among the first to test Sephora at Kohl’s in smaller store formats).

[See more: How Innovative Store Partnerships Are Changing the Face of Retail]

This “modern” Kohl’s includes the prominent position of Sephora at the front of the store with expanded categories in the surrounding areas such as active, as well as casual and new brands like Draper James RSVP.

Further, Kohl’s is introducing dedicated zones for discovery which will inspire curations of cross-category product and brands including diverse- and female-owned companies. Since the inception of Kohl’s emerging brand program in 2019, the company has introduced over 70 new brands to its customers. By transforming the store flow, the retailer aims to create a sense of discovery when customers enter.

New Integrated Store and Digital Technology

Additionally, Kohl’s ongoing investments in technology across its physical footprint continue to deliver new store experiences. The company is rolling out self-serve buy-online-pickup-in-store and by the end of the year, it will be available in all stores. Kohl’s is also continuing to test self-serve returns, currently in over 100 stores, with more planned throughout the next 18 months. The self-return experience offers a simple in-store drop-off process. Additionally, self-checkout is being tested and will deliver a new kind of checkout experience for customers.