Kohl's Remodel Strategy

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Kohl's Remodel Strategy

  1. 1. Kohl’s Remodel Strategy<br />Mission Statement:<br />To be the leading family- focused, value- oriented, specialty department store offering quality exclusive and national brand merchandise to the customer in an environment that is convenient, friendly, and exciting.<br />
  2. 2. Summary of Store Visit<br />Summary:<br /><ul><li>A store visit was conducted at the beginning of our remodel analysis for Kohl’s to gather ideas for improvement in opportunities to create a better shopping experience for “HER”.</li></ul>Market Opportunity Analysis:<br />Update the design and layout on the dressing rooms<br />The plan is to make it more chic and comfortable feeling<br />Update lighting<br />Cost effective LED lights<br />Trendy and promote more sales<br />
  3. 3. Trend Concept<br />Relocate and remodel the current dressing rooms<br />ONE centralized dressing room towards back of store<br />Extend length of doors/walls<br />Increase room size<br />Add upholstered seating<br />Eliminate carpet<br />Utilize new low- wattage lighting<br />Online computer system with scanners <br />Two located in new location<br />Touch screen<br />Connected to kohls.com<br />
  4. 4. Recommendations<br />*Waiting area seating with wall art, labeled sign into the entrance, continuous flooring into the dressing room from the navigable path from throughout the store, doors and walls flushed with floor and up to 7’ high, floor length mirrors, solid wood doors, and in a centralized location.<br />
  5. 5. Store layout<br />*Layout for the 88,000 sq ft prototype stores.<br />* Suggested space allocated at least 10% of stores square footage<br /><ul><li>*Displays the allocated space for each department area, cash registers, restroom/guest services, the front entrances, the navigable path around the store, and the new remodel plan for the centralized dressing room.</li></li></ul><li>Dressing Room Floor Plan<br />Insert prototype<br />
  6. 6. Trend Concept Benefits<br />“Customers who use a fitting room are 71% more likely to buy than those simply browsing the sales floor.”<br />More space throughout for store display<br />New feeling of comfort and cleanliness<br />Better clothing appearance<br />Reduced energy costs<br />Fewer sales lost <br />Increase gross margins<br />Fewer disappointed customers<br />Frequent exposure to Kohls.com<br />
  7. 7. Justification<br />Place where majority of buying decisions are made<br />Not on directional map<br />Relatively cramped<br />Place where customers feel most vulnerable<br />Help maintain a comfortable home like atmosphere<br />Help make the buying decision easier<br />
  8. 8. Demographics<br />Lewisville area:<br />49.6% males<br />50.4% females<br />Median income level: $50,000- $74,999<br />Lewisville and Valley Ranch:<br />Boomtown Singles<br />Young Influentials<br />
  9. 9. Industry Analysis<br />Industry trends:<br />Use of technology<br />RFIDs<br />Estimated for 2015, 73% growth of usage by customers, but only 23% intend to use the technology.<br />Scanners<br />“Magic Mirror”<br />Additional space<br />Change ambience<br />
  10. 10. Competitor Analysis<br />High- end to low- end stores<br />Examples: Nordstrom, Macy’s, TJ Maxx<br />2007 recession<br />Company’s total revenues topped $17.2 billion in 2009, a 4.8% increase from previous year<br />Advantages<br />
  11. 11. SWOT Analysis<br />
  12. 12. Finance Projections<br />The Suburban Prototype (88,000 sq. ft) brings in about $16 million in sales. <br />(est. $182 per square foot)<br />Past Sales<br />2003 to 2008 there was a 60% increase in sales<br />$10.3 billion to $16.4 billion<br />In 2008, there was a .5% decrease in sales due to economic recession<br />Gross Margin<br />Larger margin on clothing<br />Remodeled dressing rooms lead to more sales<br />Costs<br />Cut costs on construction<br />Projected remodel time reduced<br />Centralization reduces décor costs<br />Store remodel budget $3 million<br />Estimated BUDGET TO BE USED for the remodel is $1.5 million<br />After remodel, sales planned to continue to grow.<br />Technology bring in additional sales<br />Additional sales of $100,000 per store per year, which equals 0.5% of total average store sales of $20 million. Based on 1,000 stores this would equal $100 million.<br />Adding kiosks increases productivity and customer satisfaction by 90%<br />
  13. 13. Measurable Performance<br />Objectives<br />Provide a better shopping experience<br />Reduce remodel cost and time<br />Continued focus on future<br />Create a centralized area<br />Goals<br />Clean up merchandise clutter<br />Introduce technology<br />Environment for the customers to feel at home<br />Completed Remodel<br />Month 1<br />Finalize Remodel<br />Month 3<br />Month 2<br />
  14. 14. Promotional Strategy<br />In-store marketing<br />Marketing slogan<br />“More space for “HER””<br />Letting Kohl’s customers know about the new dressing room location and how it will better their shopping experience<br />Asking her to try out the new renovations<br />

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