Consumer Insights

Kohl’s – An Unlikely Source Of Tech Innovation

A la Biff of “Back to the Future” fame, the only sure-fire way to predict the future of retail is to skip ahead a few years and take a peek at a record of stock numbers. Failing that, proactive strategies that seek the initiative through cutting-edge technology are never a bad option, though choosing which promising path of the future to follow isn’t always so easy.

That’s why Kohl’s, an unlikely crucible of the next wave of retail tech innovation, wants to lead the charge on all fronts.

Quartz reported on the affordable apparel retailer’s apparent newfound love for everything digitally avant-garde, and it’s throwing big money in the way of product research and development to make sure it can remain competitive with rivals and attractive in the eyes of its consumers. Ratnakar Lavu, executive vice president of digital technology at Kohl’s, explained why his company has spent a total of $1 billion in tech R&D since 2012 – even though not a single dollar has gone toward selling clothes.

“Traditionally, we’ve been a little bit behind in technology,” Lavu told Quartz. “We caught up, but we’re also thinking about what does the next three years, five years look like … We don’t want to ever fall behind. If Amazon were to change those customer expectations, we have to be there … We’re testing so that when the time is right, we’re not behind and we know exactly how to do it. ”

Lavu’s admission that Kohl’s — as well as just about everybody else — is chasing Amazon is significant. Though Kohl’s might not be worried about ceding millions in sales to the online marketplace’s fashion division, the experience that Amazon provides – from the product research stage to checkout and through to a rash of delivery options – has the ability to turn Kohl’s own customers against them if they can’t provide a similar experience that’s quickly becoming an expected amenity – even for budget apparel.

If nothing else, the 2015 total of Kohl’s new-age tech investments are a fulfillment of its earlier promises. In January 2015, Lavu updated shareholders and National Retail Federation convention attendees on Kohl’s progress with beacons in their stores, Mobile Marketer reported. More than 20 were equipped to start the year, and though Lavu admitted that not all experiments they tried proved fruitful, his team remained open to exploration with the tech – a compatible philosophy for a retailer that wants to be ready for anything.

2016 may just test that attitude. Lavu and Kohl’s are slated to launch a beacon-focused program in the next year that not only makes use of embedded RFID tags on items to help shoppers navigate to the right place in stores, but also a feature called the “digital hanger” that can suggest curated outfits based on consumer preferences.

And while beacons may be a good starting point for establishing oneself in the growing Internet of Things, gaining experience in all the other mediums they interact with is just as important.

According to Quartz, Kohl’s is doing just that. The retailer has been signing partnerships with a number of tech startups to spearhead several seemingly far-fetched programs. NAO Robot is working on an automated robotic assistant to prepare and hand out samples from model Keurig displays, though successive developments – wherever they may lead – could see a fair amount of automation entering the back of store as well, freeing employees up for customer service-facing tasks instead.

“Not moving fast is far riskier than trying things out and failing in some and succeeding in others,” Lavu told a crowd to kick off 2015. “Test, learn, iterate again, and then continue to change.”

In 2016, it looks like Kohl’s will do just that.

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