Sephora at Kohl’s Has a Promising Start, Showing Value of Experiential Retail

In December, Kohl’s and Sephora teamed up to place a major bet on in-person retail, announcing a long-term partnership that will see the beauty giant open 850 shop-in-shops inside Kohl’s stores by 2023.

On Aug. 6, the first of these locations opened in four Kohl’s doors — Sterling Heights, Mich.; Woodbury, Minn.; Ramsey, NJ; and Brookfield, Wis. — and already, early signs point to an encouraging start to the initiative.

According to a report by the foot traffic analytics company Placer.ai, weekly visits to the four Sephora at Kohl’s stores were up by an average of 28.3%, 39.6% and 12.5% in the weeks beginning Aug. 16, 23 and 30 when compared with a baseline of their visits the week of July 5. Looking at Kohl’s stores nationwide, average visits were up 22.6%, 7.2% and down 3.5% for the same three weeks.

Customers also seem to be coming from further afield to shop the more than 125 prestige beauty brands that Sephora is bringing to Kohl’s. Between July and August, the True Trade Area (a Placer.ai measure of how far 80% of visitors live from a given store) of each of the four stores grew substantially. In Sterling Heights, for instance, it grew from 75.1 sq. miles to 96.7 sq. miles; in Woodbury, it increased from 116.9 sq. miles to 136.3 sq. miles; in Ramsey, it grew from 70.9 sq. miles to 73.9 sq. miles; and in Brookfield, it rose from 51.2 sq. miles to 66.7 sq. miles.

The rollout is still in its nascent stages, but last month, another 73 shop-in-shops opened their doors, and Kohl’s plans to have roughly 200 open by this fall. As Kohl’s CEO Michelle Gass explained during a recent National Retail Federation conference, the partnership is key to the company’s strategy to get customers back in the aisles now that in-person shopping has made its triumphant return.

“Customers are going to be excited to come into stores, to browse, to discover how social experience shopping can be fun,” she said. “Stores are going to have a renaissance, so to speak. And I think people have been underestimating how that is going to unfold.”

Elsewhere, we are seeing this unfold through an array of new experiential retail concepts, including the launch of Dick’s Sporting Goods’ House of Sport stores, which feature turf fields, running tracks and rock-climbing walls, among other draws. In London, Browns’ new flagship boasts a picturesque courtyard, a zero-waste restaurant and a top-floor bar. And in Paris, Kith’s new three-floor store features a Kith Treats cereal and ice cream bar, a Kith for Sadelle’s restaurant and a basement level that will use “immersive and experiential touchpoints” to showcase new releases and collaborations.

With many customers tired of ordering everything from shoes to groceries online, retailers are counting on spaces like these to present compelling arguments for leaving the house and visiting in person.

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