Sona Chawla’s first day of work as chief operating officer of Kohl’s coincided with Cyber Monday last year. In order to get more familiar with Kohl’s newest weapons in the online shopping wars, she spent the day in a place you might not expect: The chain’s brick-and-mortar stores. Employees gave her a close-up look at a service that allows customers to buy items over the Internet and pick them up in-store, and a program to ship people’s online orders from stores — not warehouses.
What she found wasn’t exactly a paragon of efficiency: “We went to the backroom, and we took a look at a [pickup] order,” Chawla said in an interview. “And it was handwritten — scribbled.”
There were other hitches, too. Pickup orders were sometimes stored hundreds of feet away from the desk where customers came to retrieve them, slowing service. There was no route-planning technology for gathering up orders speedily; employees simply used their knowledge of the store’s floorplan to make their best guess. Workers had to use separate apps for fulfilling orders that required store pickup and those that would be shipped from the store.
This holiday season, Kohl’s is running a much more sophisticated operation, having added new technology, more store workers focused on online order fulfillment, and different tactics for stockpiling items once the orders have been collected. The company’s hope is that all these efforts help it improve in an area where the stakes are growing only larger: Last year during the holidays, Kohl’s fulfilled some 30 percent of its online orders in its stores, and this year it expects that share to grow to 40 percent. And the store pickup customer, in particular, is an important one to satisfy: Chawla says these “click-and-collect” shoppers tend to be some of the chain’s most loyal and engaged shoppers. (More than 75 percent of them are enrolled in the Kohl’s loyalty program.)
The changes at Kohl’s offer a window into an important dynamic in the retail industry right now: Traditional brick-and-mortar stores are, of course, hustling to win your shopping dollars with appealing merchandise and good service. But they are also engaged in a less visible but equally important race to revamp their supply chains to cater to our want-it-now ways.
Last holiday season, retailers overall didn’t do such a great job when it came to executing click-and-collect programs. According to a study by consultancy Kurt Salmon, some 60 percent of such orders placed on Cyber Monday ran into problems. Customers were given the wrong items, or orders were cancelled because the product was actually out-of-stock.
The latest iteration of the online fulfillment process at Kohl’s reflects lessons learned during last year’s holiday rush.
“We did a lot of listening sessions with our associates,” Chawla said, using company jargon for employees. “We co-opted them into the design process and said, ‘What didn’t work, tell us how to make things efficient.'”
Some of the changes that followed were customer-facing: The retailer added clearer signage and a dedicated line for pickup orders. It added touches such as letting the shopper add an alternate contact person for orders, so shoppers can send someone else to pick up an item if need be.
But perhaps the most crucial changes are more behind-the-scenes. Last year, the company relied on paper-based picking, meaning staffers would print out pickup slips and manually sort them into an efficient sequence for retrieval.
That made it hard to assemble orders quickly and efficiently. Now, workers can zip around the store using a handheld device that puts all these orders in one system and prioritizes them by when they’re due to be picked up. The device also shows the staffer the most efficient way to traverse the stock room or store aisles to get the goods. (Other retailers, including Target and Walmart, use a similar set-up.)
Kohl’s has also cleared out more space in the back of its stores to pack up the orders. Last year, stores had just one station for this; now, each store has at least two.
You’re bound to hear lots of encouragement from retailers this holiday season to take advantage of their store pickup programs: They like that this model allows them to fulfill online orders more quickly and profitably. They can give you your items in hours, not days, and can do so without paying to ship it to you.
Kohl’s said it is finding there is another advantage to in-store pickup. For every $100 someone spends at Kohl’s on store pickup, people buy, on average, $25 worth of additional stuff when they set foot in the store. So it’s allowing the chain to re-introduce the idea of the “impulse buy” into the otherwise highly task-oriented world of online shopping.
Plus, a sizable number of consumers appear to like this format: Some 47 percent of shoppers surveyed by the National Retail Federation said they planned to use click-and-collect services this holiday season. Analysts say customers who choose this option are often looking to avoid shipping charges, or like that they can get the order sooner than they would via mail.
These kinds of findings are why Kohl’s and many other retailers are going to be flogging this option hard for the holidays.
“Tell me if you see a piece of Kohl’s marketing material without ‘buy online, pickup in store,'” Chawla said with a laugh.
Chawla said all the changes to the way we shop has led to key changes in the way Kohl’s thinks about its workforce, too. They are now dedicating more time for worker training, for example.
“The role of the store associate is moving from being shopkeeper to part fulfillment specialist, part customer service representative,” Chawla said. “So we have to train our associates for all of those things.”