Kohl's Corporation (KSS): Business Model Canvas [10-2024 Updated]

Understanding the business model of Kohl's Corporation (KSS) reveals how this retail giant navigates the competitive landscape of affordable fashion and home goods. From strategic partnerships with brands like Sephora to a robust e-commerce platform, Kohl's has crafted a model that emphasizes customer experience and value. Dive into the details of their

• key activities
• customer relationships
• revenue streams

and discover what makes Kohl's a leader in the retail sector.

Kohl's Corporation (KSS) - Business Model: Key Partnerships

Collaborations with major brands like Sephora

Kohl's Corporation has established a significant partnership with Sephora, enhancing its beauty product offerings within its stores. As of August 3, 2024, Kohl's operates over 1,000 Sephora locations, including 861 full-size shops averaging 2,500 square feet and 189 small format shops. In the second quarter of 2024, sales from the Sephora partnership increased approximately 45% year-over-year, contributing to a 16.6% increase in the Accessories segment. This collaboration is part of Kohl's strategy to enhance customer experience and expand its product range, particularly in the beauty sector, which has shown resilience amid overall sales declines.

Partnerships with logistics providers for supply chain efficiency

Kohl's has invested in optimizing its supply chain by partnering with logistics providers to improve operational efficiency. The company reported a 9% reduction in inventory levels year-over-year as of August 3, 2024, which is attributed to better inventory management and logistics strategies. The successful execution of these partnerships has facilitated a more streamlined distribution process, enabling Kohl's to maintain better in-stock positions and reduce markdowns.

Co-brand credit card initiatives with Capital One

Kohl's collaborates with Capital One for its co-branded credit card program, which is integral to its customer loyalty strategy. As of August 3, 2024, the credit card operations generated a significant portion of Kohl's other revenue, although this has seen a decline due to increasing credit loss rates. The partnership aims to enhance customer engagement and drive sales through rewards and incentives, although recent regulatory changes may impact future revenues from this segment. In 2024, Kohl's is actively pursuing initiatives to scale its co-brand card to mitigate these impacts.

Partnership Type	Details	Impact on Sales
Sephora Collaboration	Over 1,000 Sephora locations within Kohl's stores	45% increase in Sephora sales year-over-year
Logistics Partnerships	Enhanced supply chain efficiency	9% reduction in inventory levels
Capital One Credit Card	Co-branded credit card program for customer loyalty	Decline in other revenue due to credit loss rates

Kohl's Corporation (KSS) - Business Model: Key Activities

Retail operations in physical and online stores

Kohl's Corporation operates 1,176 stores and a comprehensive online platform as of August 3, 2024. The net sales for the second quarter of 2024 were reported at $3.525 billion, reflecting a decrease of 4.2% from $3.678 billion in the same quarter of 2023. Digital sales accounted for 25% of net sales during this period, with a decrease of 4% year over year.

Inventory management and supply chain optimization

Kohl's has emphasized strong inventory management, with a reported 9% decrease in inventory levels year over year, totaling approximately $3.151 billion as of August 3, 2024. The cost of merchandise sold for the second quarter was $2.128 billion, down from $2.242 billion in the prior year, leading to a gross margin of 39.6%. The company's strategy includes managing receipts down by 7% compared to the previous year to enhance flexibility and maintain better in-stock positions.

Marketing and promotional campaigns

Kohl's has invested in marketing and promotional campaigns, which contributed to an increase in SG&A expenses by 3 million dollars in the second quarter of 2024, totaling $1.250 billion, a decrease from $1.304 billion in the same quarter of 2023. The company continues to focus on enhancing customer experience as part of its marketing strategy, which is reflected in the overall sales performance and customer engagement initiatives.

Key Activity	Q2 2024 Results	Q2 2023 Results	Year-over-Year Change
Net Sales	$3.525 billion	$3.678 billion	-4.2%
Digital Sales Contribution	25% of total sales	25% of total sales	0%
Inventory Level	$3.151 billion	$3.474 billion	-9%
Cost of Merchandise Sold	$2.128 billion	$2.242 billion	-5.1%
Gross Margin	39.6%	39.0%	+59 bps
SG&A Expenses	$1.250 billion	$1.304 billion	-4.2%

Kohl's Corporation (KSS) - Business Model: Key Resources

Extensive store network across the United States

Kohl's operates a total of 1,176 stores as of August 3, 2024. This extensive network allows the company to reach a wide customer base across various demographics. The stores are strategically located to maximize accessibility and convenience for shoppers.

Strong brand portfolio including exclusive and private labels

Kohl's boasts a diverse portfolio of brands, including exclusive and private labels that cater to various consumer preferences. Notably, the company has expanded its partnership with Sephora, having a presence in over 1,000 stores, with 861 full-size and 189 small-format shops. This enhances Kohl's appeal in the beauty segment and contributes significantly to foot traffic and sales.

Brand Portfolio	Type	Notable Features
Sephora at Kohl's	Exclusive Partnership	Enhances beauty product offerings, attracts diverse clientele
LC Lauren Conrad	Private Label	Women's apparel and accessories, popular among young adults
Food Network	Exclusive Brand	Kitchenware and home goods, aligns with culinary interests

Advanced e-commerce platform and technology infrastructure

Kohl's has invested significantly in its e-commerce platform, which represented 25% of net sales during the second quarter of 2024. The digital sales experienced a decrease of 4% in the second quarter compared to the prior year, indicating ongoing challenges in the online retail space. However, the company continues to enhance its technology infrastructure to support omnichannel strategies, allowing customers to shop seamlessly across physical and digital platforms.

Financial Metrics	Q2 2024	Q2 2023
Net Sales	$3.525 billion	$3.678 billion
Digital Sales Percentage	25%	25%
Comparable Sales	-5.1%	0.3%
Gross Margin	39.6%	39.0%

Kohl's Corporation (KSS) - Business Model: Value Propositions

Wide range of quality products at competitive prices

Kohl's Corporation offers a diverse selection of products across various categories, including apparel, footwear, accessories, beauty, and home products. As of August 3, 2024, the company's net sales were reported at $3.525 billion, reflecting a decrease of 4.2% compared to $3.678 billion in the same period of 2023. Notably, the women's apparel segment generated $1.004 billion in sales, while the men's segment accounted for $740 million. The accessories category, which includes Sephora products, saw a significant increase of 16.6%, totaling $666 million. This demonstrates Kohl's commitment to providing a wide range of quality products at competitive prices, appealing to various customer segments.

Commitment to customer service and shopping experience

Kohl's has made substantial investments in enhancing the customer shopping experience. In 2024, the company plans to invest approximately $500 million in various initiatives, including store improvements and technology enhancements. The company's selling, general, and administrative (SG&A) expenses were reduced by $54 million to $1.250 billion in the second quarter of 2024, reflecting a focus on efficient operations while still prioritizing customer service. Furthermore, the company's digital sales represented 25% of net sales, indicating a strong omnichannel presence that enhances the overall shopping experience.

Exclusive partnerships with popular brands like Sephora

Kohl's strategic partnership with Sephora has been a key driver of growth. As of August 2024, Kohl's operates over 1,000 Sephora shop-in-shops across its stores, including 861 full-size and 189 small format locations. In the second quarter of 2024, Sephora sales increased by approximately 45%, contributing significantly to the Accessories category. This collaboration not only expands Kohl's product range but also attracts a broader customer base looking for premium beauty products at competitive prices. The investment in the Sephora partnership is part of a broader strategy to enhance Kohl's product offerings and market presence.

Category	Q2 2024 Sales (in Millions)	Q2 2023 Sales (in Millions)	Percentage Change
Women's Apparel	$1,004	$1,099	-8.6%
Men's Apparel	$740	$809	-8.5%
Accessories (including Sephora)	$666	$571	+16.6%
Home Products	$436	$462	-5.6%
Children's Apparel	$359	$387	-7.2%
Footwear	$320	$350	-8.6%

Kohl's Corporation (KSS) - Business Model: Customer Relationships

Loyalty programs and rewards for frequent shoppers

Kohl's has established a robust loyalty program known as the Kohl's Rewards program, which allows customers to earn 5% in Kohl's Cash on every purchase. In the second quarter of 2024, the program witnessed a significant participation rate with over 30 million active members. The total amount of Kohl's Cash earned by customers during the quarter was approximately $150 million, reflecting the company's focus on enhancing customer loyalty and repeat purchases.

Personalized marketing strategies based on customer data

Kohl's leverages customer data to drive personalized marketing initiatives. In 2024, the company reported that personalized email campaigns accounted for 25% of their overall marketing efforts, resulting in a 15% increase in customer engagement rates compared to the previous year. The average order value for customers receiving personalized offers was approximately $75, compared to $60 for those who did not receive such offers. Additionally, Kohl's invested around $50 million in data analytics to further refine their targeting strategies.

Engagement through social media and community events

Kohl's has actively engaged customers through social media platforms, achieving a follower base of over 10 million across various channels. In 2024, Kohl's hosted more than 100 community events nationwide, which attracted approximately 300,000 attendees. These events not only promote brand awareness but also foster community relationships. The company's social media campaigns have led to a 20% increase in online sales attributed to social media referrals, amounting to $200 million in revenue for the year.

Metric	Q2 2024	Year 2023	Change (%)
Kohl's Rewards Active Members	30 million	25 million	20%
Kohl's Cash Earned	$150 million	$120 million	25%
Personalized Campaign Engagement Rate	15%	10%	50%
Social Media Followers	10 million	8 million	25%
Community Event Attendance	300,000	250,000	20%

Kohl's Corporation (KSS) - Business Model: Channels

Physical retail stores in key locations

Kohl's operates a total of 1,176 stores as of August 3, 2024. These stores are strategically placed in high-traffic areas across the United States, allowing for maximum customer accessibility. The stores typically feature a consistent merchandise assortment while also catering to local preferences. Additionally, Kohl's has integrated Sephora shop-in-shops in over 1,000 stores, enhancing their product offerings in beauty and cosmetics.

E-commerce platform for online shopping

Kohl's e-commerce platform, available at www.Kohls.com, has become a significant channel for sales. In the second quarter of 2024, digital sales represented 25% of net sales, maintaining the same penetration percentage as in 2023. However, digital sales decreased by 4% in the second quarter compared to the previous year. The overall net sales for the quarter were $3.525 billion, with digital sales contributing to this figure.

Mobile app for convenience and promotions

Kohl's mobile app enhances customer engagement and convenience by providing easy access to promotions, product information, and online shopping capabilities. The app is designed to facilitate seamless omnichannel experiences, where customers can shop online and choose to pick up in-store or have products delivered to their homes. Although specific mobile app metrics are not detailed, the app plays a crucial role in driving customer loyalty and sales.

Channel	Details	Performance Metrics
Physical Retail Stores	1,176 stores; includes Sephora shop-in-shops	Consistent merchandise assortment; local preferences catered
E-commerce Platform	Website: www.Kohls.com	Digital sales at 25% of net sales; $3.525 billion total net sales in Q2 2024
Mobile App	Convenience for online shopping and promotions	Enhances customer engagement; facilitates omnichannel sales

Kohl's Corporation (KSS) - Business Model: Customer Segments

Families looking for affordable clothing and home goods

Kohl's targets families seeking budget-friendly options across clothing and home goods. In the second quarter of 2024, net sales reached $3.525 billion, a decrease of 4.2% from the previous year, reflecting consumer sensitivity to pricing amidst economic pressures. The company's focus on private-label brands and sales promotions appeals to value-conscious families. For instance, women's apparel accounted for $1.004 billion, while home goods generated $436 million in sales.

Young adults interested in trendy fashion and beauty products

Kohl's has increasingly catered to young adults by expanding its offerings in trendy fashion and beauty products. The addition of Sephora shop-in-shops has enhanced its appeal, with accessories sales, which include Sephora, increasing by 16.6% to $666 million in the second quarter of 2024. The overall strategy emphasizes a blend of affordability and trendiness, aligning with the purchasing habits of younger consumers.

Value-conscious consumers seeking quality at a good price

Kohl's serves a broad segment of value-conscious consumers who prioritize quality at competitive prices. This demographic is critical, especially as the company navigates a challenging retail environment. In 2024, Kohl's expects net sales to decline by 4% to 6%, indicating a strategic focus on maintaining value propositions amidst fluctuating consumer confidence. The gross margin as a percentage of net sales stood at 39.6%, reflecting improved inventory management which is crucial for attracting price-sensitive shoppers.

Customer Segment	Key Characteristics	Recent Sales Data
Families	Budget-conscious, seeking clothing and home goods	Net sales of $3.525 billion; Women's apparel: $1.004 billion; Home goods: $436 million
Young Adults	Interested in trends and beauty products	Accessories sales increased by 16.6% to $666 million
Value-Conscious Consumers	Prioritize quality at a good price	Gross margin at 39.6%; expected net sales decrease of 4% to 6%

Kohl's Corporation (KSS) - Business Model: Cost Structure

Costs related to merchandise and inventory management

The cost of merchandise sold for Kohl's Corporation for the second quarter of 2024 was $2.128 billion, a decrease from $2.242 billion in the same period the previous year. For the year-to-date period, the cost of merchandise sold was $4.051 billion compared to $4.289 billion last year, reflecting a total decrease of $238 million.

Kohl's inventory as of August 3, 2024, was reported at $3.151 billion, a reduction of 9% from the previous year. The company emphasized strong inventory management practices, which contributed to improved gross margins, reported at 39.6% for the second quarter of 2024.

Operational expenses including rent, utilities, and salaries

Kohl's selling, general, and administrative (SG&A) expenses totaled $1.250 billion for the second quarter of 2024, down from $1.304 billion in the previous year. Year-to-date SG&A expenses were $2.478 billion, reduced from $2.542 billion. SG&A represented 33.5% of total revenue in the second quarter, consistent with the prior year.

Operating expenses also included depreciation and amortization costs of $188 million for the second quarter, slightly up from $186 million in the previous year. Interest expenses for the second quarter were $86 million, down from $89 million in the same period last year.

Marketing and advertising expenditures

Kohl's marketing expenses increased by $3 million in the second quarter of 2024, totaling $56 million. For the year-to-date period, marketing expenses totaled $112 million, reflecting a $7 million increase compared to the previous year. The company has been investing in marketing initiatives to support growth strategies, including its Sephora partnership and other promotional activities.

Cost Type	Q2 2024 ($ Millions)	Q2 2023 ($ Millions)	Year-to-Date 2024 ($ Millions)	Year-to-Date 2023 ($ Millions)
Cost of Merchandise Sold	2,128	2,242	4,051	4,289
SG&A Expenses	1,250	1,304	2,478	2,542
Depreciation and Amortization	188	186	376	374
Interest Expense	86	89	169	173
Marketing Expenses	56	53	112	105

Kohl's Corporation (KSS) - Business Model: Revenue Streams

Sales from merchandise in stores and online

In the second quarter of 2024, Kohl's Corporation reported net sales of $3.525 billion, a decrease of 4.2% compared to $3.678 billion in the prior year. Year-to-date net sales totaled $6.703 billion, down 4.7% from $7.033 billion in 2023. The decline was attributed to a 6% decrease in average transaction value, partially offset by a 2% increase in transaction volume

Merchandise Category	Q2 2024 Sales (in Millions)	Q2 2023 Sales (in Millions)	Change (%)
Women's	$1,004	$1,099	-8.6%
Men's	$740	$809	-8.5%
Accessories (including Sephora)	$666	$571	+16.6%
Home	$436	$462	-5.6%
Children's	$359	$387	-7.2%
Footwear	$320	$350	-8.6%

Revenue from credit card operations

In 2024, revenue from Kohl's credit card operations was included in the 'other revenue' category, which totaled $207 million in Q2 2024, down from $217 million in Q2 2023. The decrease of $10 million reflects increasing credit loss rates within the credit business. Year-to-date, other revenue reached $411 million, a decline of $22 million from $433 million in 2023. The new regulations from the Consumer Financial Protection Bureau, which reduced allowable late fees, may negatively impact future credit card revenues.

Fees from third-party advertising on digital platforms

Kohl's also generates revenue from third-party advertising on its website. As part of the 'other revenue' category, advertising fees contributed to the overall revenue stream. Specific figures for advertising revenue were not disclosed; however, the total decrease in other revenue indicates that contributions from this segment are affected by the broader trends impacting Kohl's overall financial performance.

Revenue Segment	Q2 2024 Revenue (in Millions)	Q2 2023 Revenue (in Millions)	Change ($ Millions)
Credit Card Operations	$207	$217	-10
Other Revenue (including advertising)	$207	$217	-10