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Michelle Gass, Kohl's chief executive officer, stated that only two weeks after the launch of the first 200 Sephora in-store stores, the partnership showed the potential to provide benefits in a variety of ways.

According to Ms. Gass, Sephora in Kohl's store is driving "extraordinary growth" in Kohl's beauty business and increasing the average retail unit volume (AUR) in this category.

Ms. Gass said on Cole’s third-quarter analyst conference call: “This is the prestigious beauty of a category that we have never really provided.” Early best-selling products include Fenty, Too Faced, NARS, and the Sephora series at entry prices. Cosmetics, skin care products Tatcha, hair care products Olaplex and Gucci and Armani perfumes.

Throughout the store, Sephora is supporting the increase in sales of stores introduced into in-store stores to mid-single-digit sales, and as more and more customers learn about these stores, this is expected to be the case in the next few months Will increase.

Ms. Gas said that Sephora’s customers buy a wide range of beauty products and prices, and tend to shop throughout the store. About half of people make purchases in at least another category.

Kohl's positioned the 2,500 square foot store in front of its location and placed growth categories next to the store, including active ones.

In addition, more than 25% of Sephora shoppers are new Kohl's customers. Ms. Gass said: "They are younger and more diverse, and we are successfully promoting loyalty registration."

When an analyst asked if Kohl's expected to achieve similar sales growth like when Amazon returned goods into the store, Ms. Gass said that both measures supported foot traffic, but described the comparison as "a bit of apples and oranges." , Because the partnership with Sephora "fundamentally changed our brand and our business."

"We finally entered the beauty industry," she added. "This is prestige. It makes us a more relevant and useful retailer. And most importantly, we will build a very large beauty business. Therefore, this partnership has a lot to like-traffic , Beauty and relevance."

The management plans to open another 400 Sephora stores by the end of the spring of 2022, and 250 stores in 2023. Kohl's owns Sephora's inventory, and the two retailers share the profits generated by the store.

Discuss the question: Kohl and Sephora's partnership is off to a good start. What are the most encouraging signs? What do you think is the potential impact of this cooperation on Kohl's?

18 comments on "How big is Sephora's victory over Kohl's?"

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The most encouraging sign is that Kohl's is expanding to another 400 locations. Unfortunately, exaggerated use is still part of the CEO’s script, so I’m not sure if this is “transformational”, but the truth is that Sephora’s partnership seems to be successful in all respects, and the fact that Kohl’s is expanding It just proves positive.

Exaggeration is affirmative. The "extraordinary growth" of Kohl's beauty business-I want to know what its foundation is.

The fact that Kohl's loyalty registration rate has increased significantly is encouraging, and it has also promised to add 650 Sephora stores in the next two years.

Kohl's latest results are weak. Although most retailers saw growth in 2019, Kohl's did not—its sales fell by 0.5%. In an environment of consumer frenzy, Kohl's should benefit from the high return rate of Amazon and its few new Sephora stores. This tells you all you need to know. Sephora is a great victory and it will attract crowds. However, unless Kohl's increases its offer, the traffic will not translate into substantial incremental sales. In fact, in some stores, a shiny Sephora shop-in-shop has been added to make the rest of Kohl's look more monotonous. As we have seen in JC Penney, having a great brand like Sephora as part of the portfolio will not change your fate!

This is the real key-Kohl's has improved their own product supply. Looking around their stores recently, I was disappointed with the quality and choice of every category except the Sephora section.

Beauty is an important entry point for representing customers and attracting Sephora lovers to Kohl's. Kohl's is now the center of attention-can they take advantage of foot traffic and improve their marketing strategy? Will they actually work with Sephora to get customer feedback and insights to drive product decisions and get customers to buy the rest of the store? All of this remains to be seen. Retailers need to push the limits and understand what motivates their customers to shop throughout the store.

Sephora’s iconic brand status has brought a huge boost to Kohl’s image, and seeing the initial growth is encouraging. If the rest of the store can clean up its appearance, then Kohl's has a chance to go beyond its guidance.

If you haven't been to Kohl's store recently, then brands such as Calvin Klein, Eddie Bauer, Nine West, and Cole Haan represent a complete overhaul of retailer positioning. The installation of Sephora is by far the most important move to attract new and higher-end customers. Sephora's history at JC Penney shows that this store will attract new customers for Kohl's, but in this case, there are other compatible products available for purchase.

Personally, I usually point out that I worked at Kohl's from 1982 to 2006. I started as a cosmetics buyer, and the store’s brands include Cover Girl, Maybelline and so on. (I withdrew from these businesses because the company tried to get rid of discount and pharmaceutical competitors.) Walking into Kohl's store today and finding representatives of brands like Clinique and Lancome is surreal to me, but I certainly appreciate Kohl New ambitious method category.

When the Amazon return counter was added to the Kohl's store, I don’t remember any babble about compensation, I thought it would be more attractive. So let's look at the fourth quarter products of Sephora and non-Sephora stores. Sephora's landing on Kohl's after leaving JC Penney was a huge competitive victory in itself. How many customers from JC Penney who will never see again will turn into Kohl's shoppers?

The success of Prestige Beauty is a particularly interesting note-this is a good reminder that most consumers cross-shop across price points. Although the Sephora/Cole collaboration was a bit surprising at first, given the slightly different images of external consumers, the success of high-end brands shows that the brand has gained more attention. Although at first glance, Sephora seems to have an advantage over Kohl's.

Is Sephora a huge victory for Kohl's? Yes, I think it's great. With Kohl's selected in-store products, Sephora brand products will be closer to many customers in their own market. Smart move Cole and Sephora!

Encouraging signs include the percentage of Kohl's shoppers newly introduced by Sephora, and that they are younger and more diverse. The fact that Kohl's has opened more stores also shows its strength.

As for the transformative, I think the other panelists are right, Kohl's must improve their store experience and product adjacency on the road and within sight of Sephora, and make sure they impress those new shoppers. I think it's important to understand the insights of new shoppers and their consideration of Kohl's other products. Then, they should act on these insights in a constructive way. You don't want people to come in, go straight to Sephora and leave.

Kohl's has also taken other good steps in business operations. I have traditionally been an opponent of Kohl's, but I think it is a viable shopping place for many people, and they seem to be moving in the right direction.

The Sephora joint venture will add a rounding error to Kohl's P&L. Finally adding Kohl's position to Sephora's 500 is a good improvement for Kohl's.

But this is my big problem. Will employees working at Kohl's understand the cosmetics business like employees in Sephora stores?

This-if the store-in-shop does not provide the same type of knowledge as the ordinary store, then the experience will be different and customers will feel underestimated.

I like this move, it shows the power of co-branding. Kohl's Sephora is a big brand image enhancement for Kohl's, and it will bring Sephora to new customers from their perspective.

The partnership between complementary brands is a wise strategy, and we will see the pursuit of many brands next year. We have seen Dick's and Nike link their loyalty programs, and the Kohl's/Sephora alliance is another strong example of this trend.

There are many benefits-from obvious benefits such as attracting Sephora customers to just a general upgrade of the brand-but perhaps the biggest benefit is that I don't see the disadvantages... at least for Kohl's.

The strategy makes sense, just like in JCP. But is it useful for JCP? If it is at Kohl's, the answer seems to be "not so much".

Sears also tried this strategy. "The Ring of Beauty" is the silo in the silo. It is useless.

Kohl's is neither JCP nor Sears. In fact, it is very different from the two. In other words, has Kohl's learned from these experiences, and is it doing its best, at least not making the same mistakes?

It is best not to do business for entertainment.

What do you think is the biggest potential return of adding a Sephora store to Kohl's?