Department Stores

Kohl's is sweetening its rewards program this holiday season

Key Points
  • Kohl's is giving away more "Kohl's Cash" rewards to shoppers this holiday season than it has in the past. 
  • The retailer will also be testing new technology in stores. 
  • It hopes to top last year, when same-store sales surged nearly 7 percent during the holiday quarter. 
A shopper at a Kohl's store in Jersey City, NJ.
Nicole O'Hara | CNBC

Kohl's this holiday season will rely on more perks to lure shoppers into stores.

It will be a challenge for the retailer to top last year, when same-store sales climbed nearly 7 percent, making it Kohl's best holiday quarter ever, CMO Greg Revelle said Thursday during an event with the media. But he said the retailer is expecting to benefit from a slew of rival retailers such as Bon-Ton filing for bankruptcy and shutting stores.

As part of its strategy, Kohl's said it will be giving back more of its "Kohl's Cash" than ever before, including a pre-Black Friday event Thursday where shoppers can get $15 to use for every $50 spent. The same deal will run again from Nov. 19 to Nov. 23, according to Kohl's, and again on Cyber Monday. Shoppers are able to later redeem "Kohl's Cash" in stores and online on specific dates.

On Thanksgiving, the retailer will open its doors at 5 p.m. this year, matching its hours for last year. Rivals Target and Macy's have both also already said they plan to open at 5 p.m. that day.

Like many retailers including Walmart and Target, Kohl's also said it's making it easier for shoppers to navigate its stores during peak traffic this holiday season and will be handing out maps to customers as they come inside, highlighting where big-ticket items sit and where they can find certain Black Friday deals.

In some stores, Kohl's said it will be testing new technology such as pick-up lockers (similar to Amazon lockers), self checkout and a new mobile checkout option — where employees in the aisles use an iPad to scan items and ring a customer up right away, allowing shoppers to avoid long lines. Walmart and Target are also touting this option.

Testing 'service centers'

Within the past few weeks, Kohl's took two stores in its home turf of Wisconsin — in Grafton and in Sussex — and has turned them into what Kohl's is calling "service centers," where it will try out new technology this holiday season and beyond. There, shoppers will find self-checkout lanes, digital concierges and a larger assortment of what Kohl's says are some of its "hottest items." The company says it plans to do more with this store format in the future but didn't detail its plans beyond what it's currently testing.

Kohl's has stocked up on active wear, fuzzy pajamas and toys, which it expects to be top sellers this year, CEO Michelle Gass said. The company said it took a cue from last holiday season, when one of the most-searched terms on its website was "cozy knits." This prompted Kohl's to add more sweatshirts, blankets and soft pants for sale this year.

It's had success with brands like Under Armour and Adidas, CMO Doug Howe said.

Kohl's will also expand its electronics lineup this year, including more items sold by Amazon. Kohl's now accepts Amazon returns at roughly 100 stores across the U.S., continuing to grow its unique relationship with the e-commerce conglomerate.

Filling the void

Kohl's has been mapping out where Bon-Ton, Toys R Us and Sears are closing stores, Revelle said. In those areas, Kohl's is targeting shoppers with personalized ads, especially ahead of the holidays.

The company also has been making investments in its mobile app, where 50 percent of all digital sales are now transacted. It said during the second quarter, 40 percent of its customer base used the app six times to browse or buy something, and that number continues to climb.

U.S. online spending meanwhile is expected to grow nearly 15 percent this year to $124.1 billion, Adobe Analytics said in a new report Thursday. That far outpaces growth of about 2.7 percent predicted for stores, according to the research firm, which measures transactions from 80 of the top 100 U.S. retailers.

"Stores are really our secret sauce," Kohl's COO Sona Chawla said. "We have to win in stores" to be able to win online and everywhere else, she said.

Kohl's is expecting a strong holiday season, CEO says