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Kohl’s, Facebook, And A Sad STORY

On Tuesday, Kohl’s announced a partnership with Facebook to use the social media giant’s consumer information to select a merchandising assortment. The assortment – featuring new or unknown brands – is entitled “Curated by Kohl’s,” and is part of CEO Michelle Gass’s efforts to enhance Kohl’s relevance with younger consumers. Kohl’s plan for its execution – and how it contrasts with Macy’s STORY concept – is another example that the mindset of legacy retail executives may be holding them back in today’s market.

The “Curated by Kohl’s” assortment will launch in-store and digitally in 2020. While marketers have used Facebook’s customer data to reach target consumers for years and actively use the platforms to sell their products today, partnering directly with the platform to identify up-and-coming brands to include in an assortment is new.

The data driving these assortment decisions should be good. Flocks of new direct-to-consumer brands have used the platform as the quickest – although increasingly expensive – path to customer acquisition.

But will it play in Peoria?

Photo courtesy of Getty Images for Macy’s, Inc.

Macy’s STORY, by contrast, builds an assortment around a theme. The latest concept – “Outdoor” – includes a head-scratching Miracle-Gro partnership. A visit to the merchandising pad at the Macy’s at Woodfield Mall this weekend showed evidence that the consumer is puzzled too; despite heavy traffic in both the Chicago suburban mall and at Macy’s, there was no one shopping the pad.

STORY is also exclusively in-stores. Although individual items may be found on Macy’s site, STORY is not available as a shoppable concept online.

Kohl’s approach to creating a new, traffic-driving assortment is stronger. Kohl’s already recognizes that digital traffic is as important as physical traffic; the assortment will be available on both the site and the retailer’s mobile app. And with Facebook’s help, matching a defined target consumer with an assortment should yield more fruitful results than dropping Miracle-Gro in the store.

If executed properly, the move by Kohl’s is a further data point revealing that the mindsets of legacy retail executives must change quickly. A recent study by McMillanDoolittle revealed that only 5% of the leaders of legacy retailers have a career background that started in marketing – a function that may have a better-developed sense of meeting a defined customer’s needs.

Kohl’s Michelle Gass is one of those legacy retailers with a career rooted in marketing. Her strategies of creating traffic by leveraging Amazon’s returns and the Curated concept reveal she is thinking differently about customer acquisition and repeat visits. Acquisition for legacy retailers is no longer about additional advertising or opening new stores. And it definitely isn’t driven through assorting random products that are tailored to a fashionista-ironic mindset in a Macy’s setting – a strategy that bares a whiff of the Ron Johnson experiment at JCPenney. (Disclosure – I was briefly part of the Ron Johnson-era JCP.)

Strong retail leadership will need the foundations of smart merchandising that fits both a digital and physical setting, the know-how to combine the operations of a store and the digital world, and an understanding of how to acquire customers in today’s retail marketplace. Gass may be one of the examples of a retail leader who gets it.

This articles first appeared in Forbes.

David Weiss

David is an accomplished retail executive bringing nearly 20 years of industry experience to each client project. David has worked for multi-billion dollar global companies, venture-funded start-ups and private-equity owned turnarounds. He is known for identifying opportunities, creating focus, and building cohesive business strategies.

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