If Greg Revelle, chief marketing officer at Kohl’s, could sum up the solutions to the many challenges facing retail marketers in 2020 with one word, it would be “listening.”
That’s how Revelle and his team at the Milwaukee-headquartered retailer spent the months even prior to the COVID-19 pandemic, so that when in-person shopping at its stores temporarily shut down, Kohl’s could quickly scale features like “drive-up” purchases and create more flexible media plans to better adapt to the ever-changing times.
“At first, we dramatically reduced our media across the board,” Revelle says. “We cut off all of our print media, we called up all our broadcast partners and canceled all of our television. And even digitally, we brought our spend down pretty significantly as we were waiting out the most dramatic part of the pandemic. And then we started listening to our customers a lot more and changing things a lot more quickly in response. As we got to reopening our stores, we started with an entirely new plan, and entirely new product categories that were top of mind for the customers.”
One of those fast-growing categories for Kohl’s is beauty, as the company announced a new partnership with Sephora in December that will add 850 mini-stores from the beauty chain within Kohl’s locations by 2023. “Beauty is currently a small but important part of our business that we hope will grow tremendously over the next several years,” Revelle says. “One of the themes we loved about Sephora is that people are looking for newness, which is where Sephora leans in and does well. That’s why they’ll be so relevant to our business.”
Revelle joined Kohl’s in 2017 from previous CMO stints at Best Buy (2014 to 2017) and AutoNation (2012 to 2014), having previously worked on the M&A and investment side of business in roles at Expedia and Credit Suisse before pivoting to marketing in 2009.
Brand Innovators caught up with Revelle from Kohl’s offices in Milwaukee to learn more about the consumer behaviors impacting his business (including double-digit growth in athleisure and ecommerce), applying a sentimental approach to holiday advertising and why Kohl’s is still on UPS’ “nice list” — for now — despite the boom in ecommerce. The conversation has been edited for length and clarity.
Brand Innovators: What were some of the first changes or trends you saw in your business during the first months of the pandemic?
Greg Revelle: Home, for example, was a category that has always been strong for us, but has really accelerated during the pandemic. Casual and activewear has been strong as well. We’ve historically had a really nice balance of more dressy work type apparel, and we really had to go almost exclusively into casual and athleisure.
You reduced your media spend quite dramatically in the first weeks of lockdown. What behaviors did you start to see as your media mix ramped back up?
What we’re really monitoring now is how consumers are responding, and we’re frankly surprised at how quickly consumers have really come back into the market. We’ve been ramping up our capacities across the board, and staffed up our stores substantially in response to the demand there. Our ecommerce business has done really well — it grew 32% in the third quarter. And if you think about how to make that happen, we fulfill 40% of that demand through our stores. It’s a lot of work to get all those packages to consumers and picked up in store as well. From a marketing side, we’re gradually coming back to a lot of different channels, but probably not all the way back to 2019 levels for a little while.
What new products, programs or innovations were you investing in pre-COVID to grow your business, and how did the pandemic accelerate the deployment of those?
We announced our new multi-year plan in October that really centers on three core themes that we’ve learned a lot from in COVID, that we think will persist. One is this pivot to the active and casual lifestyle. We’re going to increase our active business tremendously over the next several years. Only 10% of our business was active over the last several years ago, and it’s now up to 20%. So we hope to get that up to 30% over the next several years. We think that’s a permanent change in how the consumer looks and dresses, so we want to lean into that.
Another thing we did was we looked at our loyalty program. Kohl’s has always been known for loyalty and value, it’s probably our greatest strength as a company. And we wanted to figure out how to double down on that. We relaunched our Kohl’s Rewards program in October and wanted to simplify the value proposition. Our customers were starting to ask for simplified promotions and offers, so we started to take out a lot of the layers and stacks in our promotion and investing more into price, so you’ll see a lot more with regard to lower prices and simplified offers.
And the last piece is really driving omnichannel. We think a lot of these trends are going to persist, many have said the COVID crisis is going to accelerate the ecommerce business by several years, and we largely agree with that. We’re investing tremendously in our store capabilities so that they can drive up and get their product contactless, and our stores will continue to ship more products to get it to customers faster.
Some major retailers have already been warned by UPS that their fulfillment might be rolled back and not delivered in time for Christmas due to this year’s extra-high demand. Are you still on UPS’ and other services’ “nice list” this year?
It’s amazing the load that’s in the ecommerce channel right now, there’s a lot of really interesting stories in the press about the capacity constraints. It’s something we look at everyday. We’ve got great partnerships with UPS and FedEx and the Postal Service, as well as a number of others. But one thing we’ve done is diversified a little bit. We want more and more partners to help us get products to customers, but we’re also really driving the “pickup in-store” capability that we have. It helps us release some of the strain. So we’ll monitor that day to day, but at some point we may have to figure out a shipping cutoff. We’re not quite there yet, but we’ll announce that soon.
From a purpose-driven standpoint, Kohl’s just announced $5 million in grants to more than 100 nonprofits. What was the brand strategy behind that, and how did you go about selecting these organizations?
One of the great things about Kohl’s is for a very long time we have been a heavy contributor to our communities. In fact, since the founding of the company we’ve donated over $750 million through our corporate responsibility efforts. And we didn’t want to stop that during the pandemic. So one of the things we’ve done is expanded our volunteer program where all of our associates are invited and encouraged to give time to their communities, and we support that with corporate donations.
And with this most recent $5 million donation to over 100 organizations across the country, we wanted to execute that in a really localized way. So we teamed up with our local store managers and asked them to help us allocate those funds, and they identified a lot of great organizations like the Red Cross, Boys and Girls Club, Alliance for Healthy Generation. And what’s also important in this time of real need for people, we’ve been donating to a number of local food banks.
Speaking of the holidays, how did you work with your teams to establish the right tone for this year’s holiday campaign, given the unique circumstances of this year’s holiday season?
We really focused this year on a much more sentimental approach. In thinking about where the customer mindset was going to be in 2020, we really identified a need for connection. And that was in contrast to years past, which were more energetic, celebratory and fun. So we really wanted to embrace that sort of theme this year.
Our overall holiday campaign theme is “give with all your heart,” which is really about giving to your everyday heroes this holiday. And we wanted to celebrate a unique connection between neighbors this year in our campaign. We think it’s really relevant to the consumer, with COVID being such a life changer, and it tells a story of hope through that. It’s really resonated with our associates here, our consumers have given us a great response, so we think we’ve really elevated the Kohl’s brand this year.
How did you pivot your media mix to better reach your customers with changing media habits?
One of the interesting things in the media landscape a lot of the trends have been accelerated, one of the wonderful things about digital gives us much greater flexibility. One of the things we’ve done recently is we in-housed a lot of our media and creative teams, and on the creative side allows us to really learn what we want to highlight, and quickly produce the assets and have those in-market within hours in many cases. That gave us the flexibility to mix up the entire marketing plan almost on a dime. And on the media side, we appreciate the flexibility to increase and decrease spend as we observe performance, as well as how customers have changed their behaviors pretty dramatically.
And there’s been a ton of innovation in social. For holiday, for example, we worked a lot with Instagram on their commerce product, which created a more seamless experience to shop for something and buy it and stay within that channel. Pinterest has made great strides with us in that regard as well. We also love the innovations we’re seeing with augmented reality. We’re starting to do Instagram Lives where every week an influencer talks about what to buy on Black Friday, what to get your kids. And we’ve been amazed by the customer experience to some of these new innovations.
Based on the new consumer trends you saw emerge this year, what are your predictions for retail in the year ahead?
The biggest thing is the integration of data and analytics into how marketers prioritize with their creative, as well as their media. There’s been a gradual rise in the use of personalization, and for us those investments are really paying off right now. Because what they’re allowing us to do is understand the individual consumer level, what’s their mindset and what are they looking for? Because of the digitization of the entire media supply chain, we’re now able to activate on those insights with more channels and touchpoints than ever. The promise of personalization in so many ways is being realized now, which is really exciting.
Andrew Hampp is an entertainment marketing consultant for Brand Innovators and the founder of consultancy 1803 LLC, based in Berkeley, California.
