Commenting on Kohl’s Q2 results released today, Mintel’s retail and apparel analyst Ali Lipson says: “Competition from other channels continues to pose a threat to Kohl’s and its value department stores counterparts. Despite Kohl’s designer collaborations in apparel, many shoppers have flocked to discount stores and outlet stores when searching for designer apparel at affordable prices. Furthermore, part of Kohl’s ability to offer low prices is by operating no-frills, lackluster stores. Many shoppers may seek alternate retailers for a more pleasant and engaging shopping experience.” “Total department store sales were valued at $64.9 billion in 2011 and increased slightly in 2012, reaching an estimated $65.5 billion. Despite this small increase, it is an improvement upon the severe sales declines the department store industry experienced during the recession, particularly in 2008 and 2009. As the economy rebounds and department stores regain shoppers, the market is expected to grow by 7.7% between 2012 and 2017, reaching $70.5 billion in 2017.” “Department stores, with their higher price point and somewhat traditional perception, experienced tough times during the recession. However, as they embrace e-commerce and learn to adapt to the competition from mass merchandisers, discount stores, and online-only retailers, there is an expectation for reasonable growth in this channel.” “Fifty-four percent of consumers have made any purchase from Kohl’s, while 19% report making a purchase from Kohl’s online. Despite some incidence of online shopping at department stores, most consumers prefer to shop in stores when shopping in this channel. Furthermore, value and mid-tier department stores tend to be preferred over upscale and luxury department stores. This is not surprising as prices are more affordable at value and mid-tier department stores compared to higher-end department stores.” “Kohl’s is most popular with older shoppers aged 65+, and this segment is the most likely to report that they haven’t visited a department store in the past 12 months. This retailer will need to directly appeal to the older crowd to get them more engaged and through the doors.” You might also be interested in: No related posts.
