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Target, Kohl's Seek to Drive Traffic With New In-Store Concepts

Target tries to attract the traditional regional mall shopper, while Kohl's introduces new concepts to compete.

After the failed sale of Kohl’s  (KSS) , the department store chain has been making some big changes. Only time will tell if these changes were made a day late and a dollar short.

Kohl's ended its negotiations with Franchise Group Inc (FRG)  citing a volatile market, but since then Kohl’s has come packing punches ready to compete in a new way.

Not long after Kohl’s ended its buyout talks, it launched Discover @ Kohl’s. Discover @ Kohl’s came at a very opportune time, right before back-to-school shopping. The launch dedicates a store department that will have quarterly changes in its offerings, allowing it to try more edgier fashions and new trends without a real commitment to the brands. Discover @ Kohl’s will include gender neutral clothing, as well as fashions featuring inclusivity and supporting women and minority businesses.

Kohl’s is reaching into Gen X pockets by using nostalgia to bring them into stores. Kohl’s recently announced a limited-time offer with partner Levi’s to bring back the Silver Tab line exclusively at Kohl's through the end of the holiday season. Those jeans Gen X’ers loved in the 80’s and 90’s are back giving them a chance to come in and buy something they loved and shop around to see if there is anything new, they might like with their old jeans.

Kohl's also recently introduced Sephora cosmetics departments within its stores after the women's makeup and skincare retailer ended its contract for in-store departments in privately held JCPenney stores, which is in direct competition with Ulta offerings in Target stores.

Kohl's Lead

 

Target Tries to be the New Regional Mall

Target is targeting its business toward people who like spending their time at regional malls with the addition of Ulta, as well as in-store Starbucks  (SBUX)  shops and Apple  (AAPL)  products. The giant retailer is hoping shoppers will detour into their stores for products they might normally travel to the mall to purchase.

Target has led the pack when it comes to reinventing itself to match with shoppers wants and sometimes needs. Shoppers go in for one thing and come out spending hundreds of dollars. Their marketing has been top notch for well over a decade keeping their customers coming into the stores repeatedly. 

Target is Not Without Its Struggles

Target like Walmart  (WMT)  is holding too much inventory that may have been sitting in containers and backed up on ships waiting to be unloaded during the covid pandemic. Now that those products have finally made it to the stores, the costs to hold on to the overstock is quite costly.

In some instances at some Target locations, if a customer tries to return or exchange a product for size, color, etc., the retailer may offer a refund and or exchange and ask that the customer keep the original purchase. It's not because Target wants to give away free products that’s for sure. But it's easier to get a customer to leave with a product they already bought and have a good feeling getting something for free, rather than take the return and then store it and try and resell it. It’s a buy one get one deal, but only if you don’t really love the first one.

Did a Target buyer screw up? Did someone make a mistake when ordering all the products? No, Target usually pushes through its inventory efficiently. Target is a well-oiled machine of processing sales. The hiccup may have come with the inflation hitting all-time highs coupled with high gas prices. These two things made for customers to pass on the Target extras they wanted to buy but shouldn’t. Customers had to buy more necessities over home goods and clothing.

Target Expands Its Partnership with Phenom

Target has mastered the market of reinventing its inventory and is working to get those extra sales they’ve become accustomed to. Target recently partnered with Tabitha Brown, a bestselling author, actress and social media queen. Before summer started, Target announced the partnership with Brown fashions. The collections were launched during the summer and should be available through Spring 2023.

Sales must have been proven for the fashion line as Target just announced that it will extend its partnership with Brown to include a second collection. The first collection included clothing, accessories, kitchen, home and office. The additional collection will expand into bright and bold stationary, organizational essentials, and décor.