Kohl’s has been rapidly revamping its approach to the consumer, testing, and in several cases, rolling out new initiatives including partnerships with everyone from Amazon and Planet Fitness to Weight Watchers and Aldi to entice shoppers.
The Kohl’s/Aldi combination store in Waukesha, WI, recently visited by HOMEWORLD BUSINESS, demonstrated how the customer acquisition initiative pairs with the company’s strategy to develop smaller sales floors that more efficiently serve consumers.
In the process, Kohl’s has been undergoing what the company designates as rightsizing as it works to effectively satisfy shoppers in more efficient spaces. As part of the process, it is introducing partnerships into its stores. The partnership with Amazon has gotten the most attention, one that included taking returns for the e-tailer and fielding a dedicated presentation of Alexa-enabled electronics.
Kohl’s then began a five-store test with Aldi. In this case, the trial required significant commitment by both partners, given that actual buildings had to be completely reconfigured to accommodate the dual operations. Typically, in the building divide, Aldi gets approximately 25,000 square feet as an adjacent tenant and Kohl’s about 63,000 square feet.
Kohl’s said it is investing in technology to allow its smaller operations, including those giving up space to Aldi’s, to maintain its ability to serve customers using less space.
In the meantime, Aldi reconfigured its floorplan in the co-residence with Kohl’s, repositioning produce, for example. Although the store in many of its aspects is a same-if-smaller version of a typical Aldi grocery location, general merchandise takes a hit in space and breadth of selection, which might make sense given the partnership. Still, some overlap exists in housewares, where Aldi includes a smattering of small electrics, tabletop, cookware, home organization and related products.
Aldi gets conspicuous locations that, as per the longstanding Kohl’s practice, operate in neighborhoods away from major power centers and mall competitors, while introducing the brand to more middle-class consumers. The partnership is consistent with Aldi moves that include creating a lighter and brighter new store prototype, and upgrading existing unit merchandising as the company pushes to attract more affluent consumers.
Kohl’s potentially gets rub off grocery shopper traffic as the company faces a growing cost of customer acquisition both in-store and online.
In a March fourth quarter conference call, Kohl’s CEO Michelle Gass said the retailer has engaged in Aldi and related partnerships, “designed to enhance the store experience for our customers, with the goal of driving more traffic to our stores and even greater relevancy. We continue to see our rightsizing strategy as an important initiative to not only leverage our real estate assets, but also drive traffic to our stores through key partnerships.”
See the gallery for a tour of the new Kohl’s-Aldi store.