It seems not enough of us have been shopping at Kohl’s lately. So Kohl’s wants to lure us back into stores, with lower prices, an Amazon partnership – and a new loyalty program that’s getting a little less rewarding.

That last bit doesn’t necessarily sound like a way to attract shoppers. But Kohl’s says it’s all part of a plan.

The retailer reported disappointing quarterly financial results last week. “We acknowledge that the year has started off slower than we’d like, and we have adjustments under way to get us back on track,” CEO Michelle Gass told investors.

Some of those adjustments will involve lowering everyday prices, having more sales and offering better deals to loyal shoppers. “We are being more competitive in pricing and promotion to maintain our relevance with our customers,” Gass said.

“We know our customers are driven by value,” Chief Financial Officer Bruce Besanko added. “And so we’re going to make the necessary changes to pricing and promotion and drive that, and we’re not going to lose out as a consequence of pricing to competitors.”

Details so far are scarce as to how big the discounts are likely to be and where in the store the best deals will be found, though Gass let on that “the Home category is kind of top of the pack” on the retailer’s list of pricing and promotional priorities, while Besanko said “there’s some permanent markdowns we’re going to take in beauty”.

One place where the deals won’t be quite as good, is in Kohl’s new loyalty program. Since last year, Kohl’s has been testing out a new “Kohl’s Rewards” program in several test markets. Unlike the current Yes2You Rewards program, Kohl’s Rewards members can get a Kohl’s Cash certificate any time their rewards balance reaches $5 or more, instead of having to wait until the end of the month. Everyone who signs up for the new program earns 5% Kohl’s Cash on every purchase, while Kohl’s credit card holders get 10%.


At least for now.

In a Kohl’s Rewards FAQ on the retailer’s website, the 10% reward for card holders is now listed as being only “for a limited time”. And Gass is now suggesting that the “limited time” may come to an end as the program rolls out to more cities this summer and goes nationwide next year.

“We’ve learned that customers love the simplicity of the program and the rewards,” she told investors back in March. “However, we also learned that we do not need to be as generous with customer rewards. Therefore, we will modify the program to optimize the rewards offerings to create the greatest impact.”

In other words, the program was popular enough when it was giving out 5% rewards, so why give away more than necessary by offering 10%?

In the meantime, Kohl’s most notable effort to get more shoppers into stores has nothing to do with discounts at all. The retailer announced recently that, after a two-year test, all locations will begin accepting returns of Amazon shipments this summer, for free. Gass called the program Kohl’s “single biggest initiative of the year”.

“It’s all about driving traffic,” she told investors last week. “Our top strategic priority is driving traffic, and this transformational program does just that. It drives customers into our stores, and we are expecting millions to benefit from this service.”

“We’re absolutely committed to getting back the momentum in the business,” Besanko pledged to investors who were no doubt disappointed about Kohl’s financial results. “We view these results as simply a speed bump and we intend to go past it and regain the momentum as we move forward through the rest of the year.”

So free Amazon returns are nice. But to shoppers who are looking for deals, Kohl’s prices, promotions and loyalty perks may help determine whether Kohl’s stumbles are truly a “speed bump” – or a dead end.

Image source: Kohl’s


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