Kohl's 2012 Annual Report Download - page 4

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Omni-Channel Shopping Experience
Practical, easy shopping is about convenience. It's about providing customers the options which allow them to shop when
they want and from where they want.
At Kohl’s, in-store convenience includes a neighborhood location close to home, convenient parking, easily-accessible
entry, knowledgeable and friendly associates, wide aisles, a functional store layout, shopping carts/strollers and fast, centralized
checkouts. Though our stores have fewer departments than traditional, full-line department stores, the physical layout of the
store and our focus on strong in-stock positions in style, color and size is aimed at providing a convenient shopping experience
for an increasingly time-starved customer.
On-line convenience begins with an easy-to-navigate, on-line shopping experience for the growing percentage of our
customers that prefer shopping on-line. Kohls.com was launched in 2001 and has experienced substantial growth, growing at
an annual growth rate of over 40% over the past three years. On-line sales exceeded $1.4 billion and accounted for
approximately 7% of our total sales in 2012. Our website currently carries over three times as many product offerings as our
stores, with a primary focus on extended sizes, product line extensions, and web-exclusive product lines.
We also are expanding our ability to meet the ever-changing needs of an increasingly technologically-savvy customer.
Our in-store kiosks allow customers to order items from our stores and have them shipped to their homes with no shipping
charges. All of our stores are equipped with Wi-Fi. We continue to improve our digital and mobile sales platforms. We are
also building the infrastructure which will allow us to ship on-line orders from our stores. During Holiday 2012, we shipped
selected on-line orders from our store distribution centers rather than our E-Commerce fulfillment centers.
Stores
As of year-end 2012, we operated 1,146 stores. We have stores in all 48 of the continental United States and Alaska. Our
stores are located in every large and intermediate sized market in the United States.
Our new store program targets profitable growth opportunities through fill-in stores in our better performing markets and
opportunistic acquisitions, when available. We opened stores in 20 new locations, relocated 1 store in Michigan and closed 1
store in Ohio during 2012. In 2013, we expect to open 12 new stores. Substantially all of the new stores opened in 2012 and
expected to open in 2013 are small stores (55,000 to 68,000 square feet).
Remodels are also an important part of our store strategy as we believe it is extremely important to maintain our existing
store base. We completed 50 store remodels in 2012 and plan to remodel approximately 30 stores in 2013. We have
temporarily slowed our remodel program as we continue to evaluate and test different categories and space allocations in our
stores.
Low-Cost Operating Structure
An important aspect of our pricing strategy and overall profitability is a culture focused on maintaining a low-cost
structure. Critical elements of this low-cost structure are our unique store format, lean staffing levels, sophisticated
management information systems and operating efficiencies which are the result of centralized buying, advertising and
distribution.
We remain focused on providing the solid infrastructure needed to ensure consistent, low-cost execution. We proactively
invest in distribution capacity and regional management to facilitate growth in new and existing markets as well as on-line. Our
central merchandising organization tailors merchandise assortments to reflect regional climates and preferences. Technological
systems and improvements support our low-cost culture by enhancing productivity and providing the information needed to
make key merchandising decisions.
Distribution
We receive substantially all of our store merchandise at our nine retail distribution centers. A small amount of our
merchandise is delivered directly to the stores by vendors or their distributors. The retail distribution centers, which are
strategically located throughout the United Sates, ship merchandise to each store by contract carrier several times a week. We
also operate four fulfillment centers that service our E-Commerce business.
See Item 2, “Properties,” for additional information about our distribution centers.
Employees
As of February 2, 2013, we employed approximately 135,000 associates, including approximately 30,000 full-time and
105,000 part-time associates. The number of associates varies during the year, peaking during the back-to-school and holiday