Kohl's is remodelling store dressing rooms to improve the customer experience. The plan is to create a centralized dressing room area towards the back of each store with larger rooms, comfortable seating, and updated lighting. This is intended to make customers feel more comfortable and allow them to better view merchandise, leading to increased sales and margins. Market research shows the remodelled space will address customer needs and match industry trends, costing an estimated $1.5 million per store with sales projected to rise by $100,000 annually per store afterwards.
Kohl's Remodel Strategy to Enhance the Dressing Room Experience
1. Kohl’s Remodel Strategy Mission Statement: To be the leading family- focused, value- oriented, specialty department store offering quality exclusive and national brand merchandise to the customer in an environment that is convenient, friendly, and exciting.
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3. Trend Concept Relocate and remodel the current dressing rooms ONE centralized dressing room towards back of store Extend length of doors/walls Increase room size Add upholstered seating Eliminate carpet Utilize new low- wattage lighting Online computer system with scanners Two located in new location Touch screen Connected to kohls.com
4. Recommendations *Waiting area seating with wall art, labeled sign into the entrance, continuous flooring into the dressing room from the navigable path from throughout the store, doors and walls flushed with floor and up to 7’ high, floor length mirrors, solid wood doors, and in a centralized location.
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6. Trend Concept Benefits “Customers who use a fitting room are 71% more likely to buy than those simply browsing the sales floor.” More space throughout for store display New feeling of comfort and cleanliness Better clothing appearance Reduced energy costs Fewer sales lost Increase gross margins Fewer disappointed customers Frequent exposure to Kohls.com
7. Justification Place where majority of buying decisions are made Not on directional map Relatively cramped Place where customers feel most vulnerable Help maintain a comfortable home like atmosphere Help make the buying decision easier
8. Demographics Lewisville area: 49.6% males 50.4% females Median income level: $50,000- $74,999 Lewisville and Valley Ranch: Boomtown Singles Young Influentials
9. Industry Analysis Industry trends: Use of technology RFIDs Estimated for 2015, 73% growth of usage by customers, but only 23% intend to use the technology. Scanners “Magic Mirror” Additional space Change ambience
10. Competitor Analysis High- end to low- end stores Examples: Nordstrom, Macy’s, TJ Maxx 2007 recession Company’s total revenues topped $17.2 billion in 2009, a 4.8% increase from previous year Advantages
12. Finance Projections The Suburban Prototype (88,000 sq. ft) brings in about $16 million in sales. (est. $182 per square foot) Past Sales 2003 to 2008 there was a 60% increase in sales $10.3 billion to $16.4 billion In 2008, there was a .5% decrease in sales due to economic recession Gross Margin Larger margin on clothing Remodeled dressing rooms lead to more sales Costs Cut costs on construction Projected remodel time reduced Centralization reduces décor costs Store remodel budget $3 million Estimated BUDGET TO BE USED for the remodel is $1.5 million After remodel, sales planned to continue to grow. Technology bring in additional sales Additional sales of $100,000 per store per year, which equals 0.5% of total average store sales of $20 million. Based on 1,000 stores this would equal $100 million. Adding kiosks increases productivity and customer satisfaction by 90%
13. Measurable Performance Objectives Provide a better shopping experience Reduce remodel cost and time Continued focus on future Create a centralized area Goals Clean up merchandise clutter Introduce technology Environment for the customers to feel at home Completed Remodel Month 1 Finalize Remodel Month 3 Month 2
14. Promotional Strategy In-store marketing Marketing slogan “More space for “HER”” Letting Kohl’s customers know about the new dressing room location and how it will better their shopping experience Asking her to try out the new renovations