Kohl’s Corporation is about to experience a significant leadership change as they prepare for a new chapter under the guidance of Ashley Buchanan, who is slated to become the CEO in 2025. The decision comes amid a backdrop of declining sales and a shifting retail landscape, raising questions about whether Buchanan can successfully steer the company back to robust financial health.
Current CEO Tom Kingsbury, who has guided Kohl’s since 2022, will step down on January 15, 2025, but will stay in an advisory role until his full retirement in May 2025. During Kingsbury’s tenure, he aimed to revitalize Kohl’s by enhancing its product assortment, improving the store experience, and nurturing partnerships, such as the collaborations with Sephora and Babies R Us. However, despite these efforts, Kohl’s reported an 8.8% decline in net sales year over year in its latest earnings report, continuing a trend of dwindling profit margins.
Ashley Buchanan previously served as CEO of Michaels, a leading crafts retail chain, for nearly five years. His extensive background includes over a decade in various leadership roles at Walmart and Sam’s Club, giving him a deep understanding of retail, customer service, and e-commerce. Michael Bender, Kohl’s board chairman, praised Buchanan’s history of improving profitability and his focus on technology and e-commerce that could help Kohl’s connect better with today’s consumers.
Buchanan’s appointment is crucial, particularly as Digital Commerce 360 projects Kohl’s online sales to reach a staggering $5.4 billion in 2024. However, he faces the challenge of strategically positioning Kohl’s in a hyper-competitive market dominated by e-commerce giants. As he steps into this role, what strategies should he prioritize to revitalize Kohl’s?
Reconnecting with Core Customers
Retail expert Tom South suggests that one key area for improvement is reconnecting with Kohl’s traditional customer base. The company made the controversial decision to reduce its offerings in fine jewelry and petite clothing, which may have alienated loyal shoppers. To navigate this barrier, Buchanan should restore popular product lines to address inventory gaps and revive interest among disenfranchised customers.
Furthermore, enhancing Kohl’s private-label offerings could provide a unique selling point that distinguishes it from competitors while catering to customer preferences. Customers value exclusive collections that resonate with their individual styles, and private labels often garner a halo effect that enhances brand perception.
Innovative Discounting Strategies
Kohl’s once thrived on appealing discounts but has struggled to maintain the excitement around its promotional offers. Ellis Verdi, president of the New York City-based ad agency DeVito/Verdi, highlights that the traditional coupon strategy has lost its appeal over time. While customers used to feel a thrill when utilizing discounts, they now perceive them as commonplace, leading to what Verdi describes as a “factory-like” shopping experience.
To reinvigorate the excitement, Buchanan should focus on creating an innovative discount culture that not only attracts shoppers but also engages them with a sense of winning. New loyalty programs, flash sales, and personalized offers using customer data analysis can generate buzz and re-establish Kohl’s as a favorite shopping destination. A modernized approach could also revamp the customer experience in-store and online, ensuring that shopping at Kohl’s is not just transactional but also pleasurable.
Enhancing Online Presence and Digital Commerce
Given the projected growth of Kohl’s online sales, leveraging e-commerce is crucial. While Ashley Buchanan has demonstrated success at Michaels, where digital transformations led to improved customer engagement, he must replicate that success at Kohl’s. This includes implementing advanced digital marketing strategies and enhancing the user experience on the Kohl’s website.
Innovating features such as live-stream shopping events or interactive digital experiences can further enhance Kohl’s online presence. Additionally, incorporating customer feedback into product offerings could help tailor the inventory to suit evolving consumer preferences. Moreover, refining partnerships like those with Sephora can create immersive shopping experiences that integrate both online and in-store interactions.
Conclusion
Ashley Buchanan’s appointment as CEO comes with high expectations for revitalizing Kohl’s. While the company faces various challenges, the right strategies could pave the way for a successful turnaround. By reconnecting with core customers, revitalizing its discount culture, and enhancing its online presence, Kohl’s can transform itself into a forward-looking retailer that resonates with today’s consumers.
The retail landscape is fraught with competition and demands constant adaptation. As Buchanan steps into his new role, his leadership will be pivotal for Kohl’s as it seeks to recover lost ground and re-establish itself as a leading player in the retail industry.