Kohl’s expands self-pickup to all stores as it struggles with declining sales

The news: Embattled retailer Kohl’s expanded self-pickup to all its more than 1,100 stores ahead of the holiday shopping season, per a company press release.

• Orders made online will be ready for pickup within two hours in a designated area of the store.
• The expansion comes as the retailer pauses its Drive-Up curbside pickup program.

The benefit: With 80% of Americans living within 15 miles of Kohl’s, the retailer has an opportunity to use its extensive retail footprint to offer enhanced convenience to shoppers.

• Adding click-and-collect capabilities to its stores allows Kohl’s to fulfill orders faster and potentially reduce costs associated with ecommerce orders.
• The new feature could help ease the rush during the holiday shopping season, leading to a better experience for both shoppers and store personnel.

Click-and-collect growth slows: While some retailers have seen success in expanding click-and-collect options, the shift back to brick-and-mortar shopping has limited the feature’s popularity.

• Both Walmart and Target have seen success in adding click and collect and curbside pickup features, with both retailers growing the former’s share of total ecommerce sales.
• But click-and-collect growth for non-grocery retailers was mixed, as shoppers opted for in-person visits over online orders.
• Nevertheless, we estimate US click-and-collect sales will grow by 19.4% this year.

Kohl’s problems continue: Capitalizing on customers’ affinity for in-store pickup may not be enough for Kohl’s to turn its business around. The retailer has had a fraught few months: After a contentious battle with activist investor Macellum Advisors, the company finally agreed to put itself up for sale—only to reject a proposed bid from Franchise Group in July.

• Kohl’s is struggling with sluggish sales: Net sales fell 5.2% year-over-year in Q1, and the company expects growth to stay virtually flat this year, per its latest earnings statement.
• To reverse the trend, the retailer is leaning on new retail concepts including Discover @ Kohl’s and its Sephora shop-in-shops to attract customers to stores.
• The company also recently upgraded its retail media network to give partners better insight into shopper behavior and preferences.

Looking ahead: The in-store pickup functionality could help Kohl’s appeal to millennials, city dwellers, and men—the cohorts most likely to use BOPIS, per Morning Consult analyst Claire Tassin. But it’s unlikely the new feature will result in a wave of new Kohl’s customers, meaning the retailer will have to continue innovating its in-store experience and product selection to drive sales growth.

Ultimately, making holiday shopping easier won’t solve Kohl’s larger issue—namely, the lack of a distinct identity. In fact, the retailer’s greatest value lies not in its brand equity but in its real estate portfolio. Without a complete brand overhaul, Kohl’s ability to survive in a crowded market is in doubt.

Go further: Read our forecast on US click-and-collect sales.

This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.

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