Kohl's Makes Careful Online Entrance

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Kohl's Department Stores has at last embraced e-commerce, more than two years after rivals Wal-Mart, Kmart, Target and smaller, specialty chains opened their online stores.

The formal debut of Kohls.com on Aug. 8 coincided with the back-to-school season, when its target customer base of women shops for children's school supplies.

Initial merchandise categories include casual apparel, luggage and accessories, footwear, electronics and décor items. But Kohl's, like many traditional retailers, knows where its bread is buttered.

"Our growth is all about bricks-and-mortar expansion," said Susan Henderson, vice president of public relations at Kohl's. "That's really the big sales opportunity.

"The volume that we expect that we will get from e-commerce will not be significant to the total business and will not be reported separately," Henderson said from the Milwaukee suburb of Menomonee Falls, WI. "That's our expectation at this point."

Henderson's circumspect attitude may be because this is Kohl's first retail venture with remote sales. The retailer has no catalog.

Kohls.com will be promoted on a market-by-market basis. Initial efforts will focus on existing customers. To this end, the retailer Aug. 12 initiated marketing that includes the Web address in print, broadcast and radio ads, plus in-store publicity.

Created by Blue Martini Software Inc., San Mateo, CA, Kohls.com is styled on Kohl's bricks-and-mortar operations. The site, which has been in test since June, displays the same prices online as offline. Sales items will be displayed on the home page and in departments.

In a tactic popular with more upscale retail chains, Kohl's allows online visitors to shop by a specific type of merchandise or brand. It has created special brand stores for Levi's, Champion, KitchenAid and Fieldcrest products.

"From our standpoint, we're starting with a limited assortment," Henderson said. "We're taking a careful approach so that we can learn to provide [online] customer service, and we'll expand further if the customer demands."

The retailer, however, is encouraging consumers to use Kohls.com for gift buying. The site has gift cards and services. An offline bridal gift registry will be integrated online by the end of 2002.

"So our challenge really was to determine in a fast-growing bricks-and-mortar environment how to appropriately integrate the convenience of a Web site that would sell directly to our customers in such a way that delivers our value proposition of brands, value and convenience," Henderson said.

Kohls.com will serve markets not yet represented by Kohl's stores, she said. Kohl's has 356 stores in 28 states. Another 24 stores in are slated to open in October, mostly in its strongest markets -- the Midwest, South and Southwest. It plans to enter California and Arizona in 2003.

Despite Kohl's focus on offline stores, Henderson does not view the company's late entry into e-commerce as a lost opportunity.

"The timing factor for us is that we did not want to rush in," she said. "We did not want to spend an inordinate amount of money. [Now] we've been able to bring online a very effective online presence that complements our bricks-and-mortar presence."


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