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Kohl's is thriving as other department stores struggle .
In November, Kohl's reported that comparable sales were up 2.5% in the third quarter of 2018. Meanwhile, other department stores like Sears and JCPenney have been struggling through crippling sales declines.
One major advantage that Kohl's has over other department stores is that nine out of 10 Kohl's stores are in suburban strip malls rather than enclosed shopping malls, so it isn't as strongly effected by declining foot traffic to malls. Kohl's has about 1,100 stores.
The low-price department store has also been benefiting from a disappearing middle class and a higher demand for budget options — two factors that have been hurting more high-end department stores.
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Kohl's has been making some major changes to its stores. In March, the company announced a plan to bring the discount grocery chain Aldi to 10 of its stores in a pilot test.
"This quarter, we launched two pilot stores where we are testing a new customer service center concept, that includes a centralized checkout, a new impulse merchandising approach, self-checkout, new self-service kiosks and buy online, pick up in-store lockers," CEO Michelle Gass said in the company's third-quarter earnings call.
The department-store chain has also expanded its partnership with Amazon and is now accepting returns from the e-commerce giant in about 100 stores. Kohl's has tripled the amount of Amazon pop-up shops inside Kohl's from 10 to 30 stores, and it will continue selling Amazon-branded products in all stores to help drive traffic.
We visited a Kohl's store in Jersey City, New Jersey, and saw for ourselves why the retailer's changes are helping it thrive:
Unlike most Kohls stores, the location we visited in Jersey City, New Jersey, was in a shopping mall.
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Business Insider/Jessica Tyler
Menswear was at the front of the store. Kohls carries name brands like Under Armour, Adidas, and Nike in its stores.
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Business Insider/Jessica Tyler
Kohls prices are generally inexpensive to begin with, and many products in store were on sale.
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Business Insider/Jessica Tyler
Products throughout the store were as much as 50% off, appealing to budget shoppers more than other high-end department stores.
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Business Insider/Jessica Tyler
The menswear department took up a little less than half of the first floor. Everything was very neat and organized throughout the store, and it never felt cluttered.
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Business Insider/Jessica Tyler
Near the menswear department were accessories like handbags ...
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Business Insider/Jessica Tyler
... and the beauty department.
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Business Insider/Jessica Tyler
It was similar to that of any other department store, but the products prices were on the lower end.
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Business Insider/Jessica Tyler
The womens department was on the other side of the makeup. It carried sportswear from brands like Adidas ...
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Business Insider/Jessica Tyler
... Levis jeans ...
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Business Insider/Jessica Tyler
... and a ton of other brands for under $40.
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Business Insider/Jessica Tyler
There was also a big clearance section offering as much as 80% off certain products, along with deals like buy one, get one half off.
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Business Insider/Jessica Tyler
Upstairs, there was a huge childrens department ...
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Business Insider/Jessica Tyler
... which included a recently remodeled toy department. Like many other retailers, Kohls is trying to win over sales from former Toys R Us customers.
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Business Insider/Jessica Tyler
The toy department — which was about half the size when we previously visited this store in March — had a small branded FAO Schwarz display, as well as other popular toys like Hatchimals and LOL Surprise.
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Business Insider/Jessica Tyler
Near the toy department, there were shoes ...
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Business Insider/Jessica Tyler
... and bedding.
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Business Insider/Jessica Tyler
The electronics department had recently been remodeled as well. It sold video games, speakers ...
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Business Insider/Jessica Tyler
... headphones ...
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Business Insider/Jessica Tyler
... Apple products ...
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Business Insider/Jessica Tyler
... and Amazon devices like the Echo Dot.
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Business Insider/Jessica Tyler
This particular location does not accept Amazon returns. Near the customer service desk, I found new pickup lockers for online orders, encouraging shoppers to shop online and pick up in-store.
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Business Insider/Jessica Tyler
Shopping at Kohls, it was clear why the department store is thriving as other department stores struggle.
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Business Insider/Jessica Tyler
See Also:
- We shopped at Kohl's and Burlington to see which was a better store, and there was a clear winner
- Photos show how much holiday shopping has changed in America over the years
- Here's what a typical work day is like for a Halal Guys cart vendor, who prepares food for hundreds of customers, works until 5:30 in the morning, and even braves hurricanes to serve hot meals
SEE ALSO: We shopped at Kohl's and Burlington to see which was a better store, and there was a clear winner