Dive Brief:
- Kohl's on Tuesday announced the launch of Kohl's Rewards, a "simplified loyalty program," according to a company press release. The retailer piloted the program in 13 markets prior to the nationwide rollout.
- Customers who enroll in the free program will earn 5% Kohl's Cash on all purchases and personalized deals and perks, regardless of how they pay.
- Reward balances are converted and issued in $5 increments of Kohl's Cash on the first day of the following month and are valid for 30 days, with no brand exclusions.
Dive Insight:
Thirty million of Kohl's existing Yes2You Rewards program are about to transition to Kohl's new loyalty structure.
Under the new plan, which the company notes is being instituted prior to the holiday season, shoppers will receive digital reminders of their available Kohl's Cash coupons and their personal balance will be printed on receipts. Kohl's will also sync that balance across shopping channels.
"We will maximize value for our Kohl's customers nationwide with the launch of Kohl's Rewards by rewarding them with more Kohl's Cash every day," Greg Revelle, the retailer's chief marketing officer, said in a statement.
The launch comes weeks after the retailer reported that second quarter revenue decreased over 23%, while net sales fell nearly 23% to $3.2 billion. Additionally, net income fell 80% to $47 million from $241 million a year ago.
Even as the company continues to recover from the punch of reduced sales in part due to COVID-19 and a temporary period of store closures this year, CEO Michelle Gass has expressed optimism that the retailer will be able to steal market share as it rebounds. In a recent earnings call with analysts, Gass pointed to years of omnichannel and digital investments as a strength, and hinted at the retailer's enhanced loyalty program as crucial to the retailer's positioning.
"Loyalty is another important piece of our strategy," Gass said. The program, which has been in a pilot stage for years, is more streamlined than in its past iteration, according to Gass.
"We saw positive results in our pilot and are confident that this new program will further enhance our position as a leader in the industry," Gass said. "It's a very important launch for us because we're starting from strength."
The retailer's position away from the mall has been an advantage compared to mall-based department stores, according to research from Retail Metrics and others. But other retailers have discovered that advantage as well, providing new competition, according to an Aug. 18 research note from GlobalData Retail Managing Director Neil Saunders. Therefore, innovation, including some revamp of its loyalty program, is necessary for Kohl's, Saunders said.
