Kohl’s won’t be going forward with the “Kohl’s Café” experiment the company tested in two southeastern Wisconsin stores for seven months.
The cafes, which were inspired by suggestions from customers, garnered positive feedback, but didn’t have the effect on traffic or sales that made it worth it, the company said.
In February, the discount department store retailer, which is the midst of a turnaround attempt, announced it would close stores as profits continue to take a hit.
Kohl’s is in the awkward position of making many of the right moves to get itself through a turnaround—yet finding that the fruits of its efforts remain elusive. The retailer is in the midst of its "Greatness Agenda," which includes mixing up merchandise and beefing up its loyalty program. Kohl’s has also invested a lot in omni-channel efforts like ship-from-store and in-store pickup of online orders, and the company has said that it will increase its IT investments to improve its mobile engagement further.
Its cafe experiment was part of an attempt to boost customer experience, something on every retailer’s to-do list this year. In-store restaurants are a storied tradition in retail, and the idea has been revived recently. Target has revamped the food concessions into more upscale Starbucks stores, and Urban Outfitters recently bought a pizza business.
But for Kohl’s, the effort apparently wasn’t worth it.
The company said it will continue looking for ways to give customers a great customer experience, but what else can it do? Experts have told Retail Dive that Kohl’s merchandise mix, which includes several national brands, and its loyalty program are key strengths. Even as it closes some stores, it’s also testing smaller formats and increasing the number of its outlet stores.
But it’s real problem may not be making itself more enticing to its customers, but the troubles experienced by those customers themselves.
“We’re the most over-stored country, and there are several overwhelming problems,” Howard Davidowitz, chairman of retail consulting and investment banking firm Davidowitz & Associates Inc., told Retail Dive earlier this year. “People have less money and this economy isn’t helping. You cannot double your number of people in poverty in 10 years, build more stores, and not have some kind of gigantic shakeout. Kohl’s is slowing down because the middle class is getting killed.”