Kohl’s officials are planning to seek more emotional connections with customers through its loyalty program, which is scheduled to be rolled out in all of its stores by the end of 2014.
“With loyalty, we’ve been seeing relatively consistent results,” Wesley S. McDonald, Chief Financial Officer, Principal Accounting Officer and Senior Executive Vice President, Kohl’s said during the question and answer portion of the company’s Feb. 27 earnings call.
“The lifts have ranged from 1.5% to 3% on the higher end,” he said. “Interestingly, our biggest lift has come in Pittsburgh, which is our highest credit penetration market in the test so far, so that’s very encouraging. Some of the markets that we’re rolling out in the spring, we’re going to roll it out to additional high credit penetration markets to see if we can replicate that lift.”
McDonald added that he’s “very encouraged” with the loyalty program thus far.
“We’re making some tweaks to it in terms of making it more than just about encouraging transactions at Kohl’s to make a more emotional connection,” he said. “That will be something that will be integrated in the loyalty program as we roll it out by the end of the year.”
Kohl’s CEO said during the earnings call that the company expanded the loyalty program to California and the Pittsburgh market in the third quarter of 2013 and plan to roll to additional markets.
“After that spring rollout, the program will be available in approximately 30% of our stores,” Mansell said. “We continue to be very pleased with the sales lifts that we are seeing in our current loyalty markets, and we now expect to have loyalty rolled out to all markets in the company by the end of the fiscal year.”
Last August Mansell was very candid about his enthusiasm and hopes for the brand’s loyalty rewards pilot program. At the time he discussed the company’s significant investment in revamping its ecommerce platform, but focused on what he thinks could be a transformative loyalty program. Kohl’s launched the loyalty pilot program in late 2012 with great success.
Kohl’s launched the loyalty pilot in Texas in May and Mansell said the program “accelerated a lot over the original pilot. Naturally, we're now going to go back in the original group of stores and add in the same elements that we've done in Texas.
Kohl's is already offering a vast amount of percentage-off promotions, dollars-off coupons in the newspaper, and Kohl’s cash. But the chain is trying to attract more loyal customers with a new “Kohl’s Rewards” program, which offers customers an additional $5 off for every $100 they spend.
The rewards program offers customers one point for every dollar they spend in store or online. For every 100 points, they get a $5 reward certificate for a future purchase. The threshold for getting rewards was lowered from the initial amount of $125 and could change before a national rollout. The program also offers “extra savings all year long,” early notification about upcoming events and sales, and a special birthday coupon by email every year.
During the Feb. 27 earnings call, Mansell also discussed the company’s eye toward mobile customer engagement.
“The largest percentage of our total investments are in technology,” he said. “Within technology investments, the largest percentage is in omni-channel and personalization initiatives launching this year. We have a whole bunch of mobile-enabled customer experiences we plan to begin to roll out.”
Mansell said those customer experiences include the next chapter of loyalty, an effort to create a new tablet-centric site, changing the mobile wallet experience, developing and launching a series of experiences around location-based marketing, personalized offers, and more product information.
“We’re highly focused on it obviously,” Mansell added. “Mobile is driving visits and it’s important that we have the best-in-class mobile experience.”