Narvar’s Post

Talk about convenience at a different level...! 🚀 🚀 🚀 🚀 🔥 🔥 🔥 🔥 Making returns a much smoother experience for consumers.

Since 2019, Kohl's sales have shrunk by $2.3 billion. That’s a pretty terrible number given consumer spending on retail rose by a dramatic $1.3 trillion over the same period.     The Kohl’s losses are a combination of existing customers spending less and the complete defection of some shoppers. Over the past five years, Kohl’s has lost 1.3 million customers: people who used to visit Kohl’s, but now they don’t. Most of these folks still buy things so it’s interesting to see where they’re now shopping, or shopping more at, instead of Kohl’s. The diagram below traces the defections. The most notable thing is the gains being made by off-price retailers. TJX – with its TJMaxx, Marshalls, and HomeGoods banners – is picking up a lot of trade. Ross, Nordstrom Rack, and Burlington are also in the mix. It’s no wonder off-price is doing so well when it’s gaining so many customers from chains like Kohl’s. What’s also notable is that online specialists don’t dominate. Amazon has picked up some trade, as has Wayfair, but neither are the main beneficiaries of Kohl’s woes. This underscores that the very simplistic narrative of ‘online killed…” is often far from the truth. It is also significant that Costco makes an appearance. Costco is a silent assassin. Many retailers don’t have it on the radar for non-food; but the reality is that Costco has a formidable non-food business. Retailers like Kohl’s don’t underperform because one large enemy comes in and swoops away all the custom. Their substantial loss of trade comes from many players nibbling away at their sales and market share. Source: Neil Saunders of Global Data

"The digital business is really what’s bringing us down.." Good to see retailers, large and small, starting to realize the fact following the vanilla ecommerce equation is NOT the best option for everyone. Good to see Kohl's also being #objective about how the utilize digital after The TJX Companies, Inc. company Homegoods decided to also stop their ecommerce site. The lesson here is not that ecommerce is inherently bad, on the contrary these brands need to excel in "local ecommerce" instead of trying to serve the whole world with their ecommerce. Use you local store strength in capturing more local online sales, that's the key! #ecommerce #localcommerce #localecommerce #local #business #customerfocused #retail #stores #shopping

It's been a while since I posted about Ross Stores. They survived the pandemic and the global supply chain issues and have come out even stronger on the other end. When compared against other retailers such as Kohl's (KSS) and Macy's (M), Ross Stores dominates. The graph below shows the 15 year performances comparison between ROST and KSS. Ross Stores has gained ~1400% and Kohls has lost ~46%. When you see long term price chart comparisons of companies that are operating in the same industry and see a massive divergence, there usually is an answer to the "Why?" question. Sometimes it is obvious, but in many cases it is hidden. Finding the answer can be helpful as well as very profitable to an investor. Ross Stores is a retail company that sources its goods through unique distribution channels. It buys overstock supply from manufacturers as well as other companies that may for example be out of season or not selling well. A winter jacket oversupply in early summer would be a simple example. Ross buys this oversupply at a cheap price, holds them in inventory, and distributes these goods to stores and the optimal time. It ends up being a smorgasbord of goods that they then present to their customers. In the retail industry, this type of presentation of goods is termed a "treasure hunt" experience. It is similar to a flea market where goods come and go, and a customer may find different bargains on different shopping occasions. It is not uncommon for Ross customers to shop on a weekly basis to find these "bargains." Ross has a dedicated set of customers who love this experience. One could simply argue that Ross Stores' competitive advantage is this "treasure hunt" experience. But that would be entirely missing the point. Long term competitive advantages, by definition, are hard to replicate by other companies. If it was easy to duplicate a competitive advantage, then the other companies would copy the business method and the competitive advantage would be whittled away. The "treasure hunt" experience is not the cause of Ross Stores' competitive advantage, but is actually the effect of it. The real competitive advantage is Ross Stores' supply chain and distribution network. They are able to supply their stores at very high inventory turnover levels by constantly pushing goods into the store to quickly replace the sold items. This can even be measure by the company financials - the inventory turn ratio measure the number of times the inventory is fully replaced in a year. For Ross this number is a solid 6.8. For Kohl's the number is 3.6. The main point is that it is very difficult for companies like Kohl's and Macy's to replicate the Ross Stores shopping experience precisely because they are unable to replicate Ross Stores' supply chain and distribution network. As an investor, it is important to ask the question "Why?" and perform the due diligence to figure out the answer. In some cases, the answer can be very profitable.

In recent years, Kohl's has faced the challenges of a rapidly evolving retail landscape. With the surge of online shopping, traditional retail has needed to adapt. Kohl’s response? Strategic partnerships. According to Jena Greene Warburton, TheStreet, in 2019, Kohl’s piloted a nationwide program with Amazon, allowing customers to return Amazon purchases at participating Kohl’s stores. This initiative not only streamlined returns but also invited customers to explore Kohl’s offerings during their visit. With every return, the customer recieved a Khols coupon (that can be coupled with existing sales and in store promos as well). Building on this momentum, Kohl’s partnered with LVMH powerhouse SEPHORA in 2021, integrating Sephora’s beauty expertise into stores. This collaboration proved to be a game-changer, contributing to a 90% lift in year-over-year sales growth in 2023. The company aims for $2 billion in sales by 2025 through similar smart partnerships. Looking ahead, Kohl’s is set to expand these successful strategies in 2024 with the introduction of Return Drop at Kohl’s, enhancing the efficiency of returns at participating locations. Kohl’s journey demonstrates the power of innovation and collaboration in navigating retail challenges. Here’s to more groundbreaking partnerships and continued growth across businesses! https://lnkd.in/gQfcrvrU #HalifaxWest #WinTogether #capitaladvisory #MandA #restructuring #operatingadvisory #RetailInnovation #Partnerships #CustomerExperience #Kohls #Sephora #Amazon #BusinessGrowth

In today’s retail landscape, offering fewer choices is more beneficial for consumers and retailers. Endless options can lead to decision fatigue and lower sales, forcing retailers to slash prices to clear inventory. Streamlining offerings helps in cost management and enhances customer satisfaction by reducing overwhelm.

When it comes to inventory, less is more. Discover how limited customer choices are boosting profits for brands and retailers. https://bit.ly/3VZgdrb #ascmimpact #inventorymanagement #inventory #retail

The ability to return Amazon orders to Kohl's, Staples, and The UPS Store is convenient for Amazon shoppers. With potential customers in their stores dropping off returns, is it a failure on Kohl's and Staples' part if they can't entice the #Amazombies to purchase anything before leaving the store? From signage, to the path to the returns counter, to displays in and around the returns area, there are plenty of opportunities to pique their interest. #ecommerce #returnsmanagement #reverselogistics #customerexperience

HdL HeadLines calls out monthly #retailtrends affecting the economy. In this edition... 🛒 Amazon Announces First Big Spring Sale 🛒 February Retail Sales Up 0.6%, Yet Fissures Emerge in What Has Been a Driving Force for U.S. Economy 🛒 Babies R Us is Coming to About 200 Kohl's Stores 🛒 February Auto Sales: Selection is Better, But Rates and Payments Are High 🛒 Lowe's New Sales Fall 17% in Q4 🛒 Store Closures 🔗 https://lnkd.in/gnnwsez8 #salestax #retailsales #localgovernment #revenuemanagement

Here are some interesting stories from the world of retail for Thursday, June 13: 👕 Shares of Oxford Industries fell after the owner of the Tommy Bahama and Lilly Pulitzer clothing lines cut its full-year sales and profit outlook, saying that consumers have become more cautious than originally anticipated. 👟 Nike suffered a setback in its bid to trademark the capitalized version of the word “footware” for tech-related products after a European Union court upheld a complaint from German rival PUMA Group. 🛠️ Lowe's Companies, Inc. names chief marketing officer: Jennifer Wilson was promoted to the role and oversees a number of initiatives including the company’s retail media network. 🍋 Amazon Fresh is trying to remind customers it's not just a fancy returns point. The stores are offering a series of grocery coupons for patrons who use the stores to drop off items that they ordered on Amazon. 💍 Kohl's plans to boost sales by expanding its jewelry options.The retailer had previously reduced space for jewelry to make room for Sephora, but now aims to re-establish its presence. 🎯 In an interview with the WSJ, Gretchen McCarthy - Target's supply chain chief - said that a focus on using consumer aisles as fulfillment centers for same-day delivery helped streamline the flow of consumer goods. 🥫 Grocery prices stayed flat in May, after ticking down the month before. But menu prices, a source of frustration for budget-conscious consumers, are still going up — even as restaurants brag about their discounted meals. 🏭 Nordstrom expects to complete the transition of operations from its fulfillment center in San Bernardino, California, to its West Coast omnichannel center in Riverside, California, during its second fiscal quarter. 🍟 California’s new $20-an-hour minimum wage law for fast food workers plunged visits to popular chains as restaurants like McDonald's, Wendy's and Burger King hiked prices to offset higher costs, according to a study. 🇨🇦 Canadian discount retailer Dollarama L.P. reported lower-than-expected first-quarter sales growth as consumer demand begins to level off. Rrevenue for the three months reached C$1.4bn ($1bn), up from C$1.29bn a year earlier. 📉 The chairman of the Federal Reserve Board has warned the battle to tame inflation is not over as policymakers signalled the central bank would cut rates only once this year. 🎮 A selloff in GameStop shares on Wednesday corresponded with a surge in volume for call options believed to be owned by Keith Gill, better known by his online handle Roaring Kitty. 📸 Creating another artificial intelligence tool for its sellers, eBay has introduced a photo background enhancement feature to improve product images, the e-commerce veteran announced. 🪧 About 6,000 grocery store workers are set to vote on strike action after the expiration of their union contract with the Kroger-owned Food 4 Less chain. #retail #retailnews #economy #DailyRetailNews