Location and Design Essential to Kohl’s Expansion Success
Kohl’s retail expansion plans are a terrific idea, but the details of the implementation, especially location selection and retail design, will impact their long-term success.
Expansion into markets congested with competitors, while illustrating Kohl’s commitment to growth, will result in less then optimal ROI. They will be risking long-term economic health and the brands’ value proposition can easily become diluted should a price war develop.
Presently urban markets are not saturated with Kohl’s competitors, because they, like Kohl’s, do not have the expertise and experience to utilize design as a business tool. These urban centers offer a wealth of low-hanging fruit ripe for picking and ignoring this potential revenue would be a strategic error.
Kohl’s must rise to the challenges unique to urban centers. They must be willing to step away from some of the efficiencies they have built into their rollout team and learn to address the specific challenges of urban centers –with design.
Design is the principal tool in urban areas because only through design can a retailer solve many of the challenges that rollout teams are not used to facing. In urban markets store size; shape and daylight openings are always different. Landlord requirements, signage codes, and local landmark and consumer commissions add complexity. Standard applications of branding elements are difficult to maintain, and executing in the typical approach is not thoughtful and leads to underperforming stores.
Companies that overcome these challenges will be rewarded with increased traffic and sales. Long-term success for Kohl’s will come with commitment to successfully embracing design and taking on the challenges of urban markets. Developing the infrastructure to manage and utilize design, so that stores can become flexible in footprint and location, will give them a competitive advantage.
The alternative, fighting for scraps in a congested marketplace, will at best secure new revenue for the short-term but at a much greater cost to the company.
Louis Lombardi is managing partner of Gilmore Group.
