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Article
Kohl's - Another Retailer Demonstrates Value from Technology

Kohl's markdown optimization technology, Merchandise and Assortment, and Customer Segmentation strategies help them achieve growth and shareholder value.


Full Article Below

Kohl's 10K for 2009 recently came across our desk. Here is another great example of how technology helps this retailer succeed.

"An important aspect of our pricing and strategy and overall profitability is a culture focused on maintaining a low cost structure. Critical elements of this low cost structure is  . . . our sophisticated information systems . . ."

Kohl's has several initiatives of interest:

"Regional assortment committee" which focuses on "accelerating sales growth by varying merchandise assortment  . . .  and store presentation by region . . . lifestyle and . . . preferences of our customers"

Their 'inventory management initiative' looks at assuring the 'right inventory, in the right stores, at the right time."

And their markdown optimization (from SAS) is 'focused on the pricing clearance items at the appropriate price for each location." We liked that precision, which yields more profit and does not erode the brand with slash and burn mark-downs that some retailers do. You need great software that can calculate extremely large databases, quickly, in order to accomplish this.

We found it interesting that Kohl's has fewer departments than their competitors. This decision comes from strong analytics of the customers, products, and brands. Having more categories does not always equate to more sales.

Their In Store Shopping Experience committee focused on improving the customer experience and presentation of merchandise.

You can read the 10k, which has many interesting elements, here:

http://www.kohlscorporation.com/InvestorRelations/pdfs/Reports/2009AnnualReportForm10K.pdf


 

To view other articles from this issue of the brief, click here.



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