Kohl's provides an excellent example of operating the whole business being 'customer-centric.' That's how we stay close to our customers.
DC Velocity: Kohl's fights back--with its stores, 2018-Feb-27, Interview of COO Sona Chawla by David Maloney
Kohl's is leveraging its stores for direct-to-customer distribution as they now operate as mini-fulfillment centers to handle online orders.
Kohl's stores currently perform 32 percent of its online fulfillment, according to Chawla. On "Cyber Monday," the stores collectively did three times the fulfillment volume of its traditional e-commerce channels, she said.
A key factor for the strategy is that stores shorten the distance to customers, Chawla said. Delivery from stores is 25 percent faster than filling an e-commerce order from a distribution center, she said.
Kohl's has increased its store traffic by encouraging in-store pickups, where customers order online but come into the stores to pick up their merchandise. Chawla says that 90 percent of online customers also shop in Kohl's stores. Incentives, such as the Kohl's Cash discount loyalty programs, also help to keep customers coming back.
Another strategy has been to break down silos between its operational teams, Chawla said. Managers now work together to make adjustments and tradeoffs, rather than just ensuring their own areas are optimized at the expense of others, she said.