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Kohl's Adds $30 Million to Holiday Budget

Increased Fourth-Quarter Marketing Spend Allocated to Broadcast, Digital

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Already the gloves are coming off this holiday season, with retailers announcing unprecedented Thanksgiving openings and "Black Midnight" entering into the lexicon.

Now Kohl's is making sure its efforts will be very well-funded. The retailer, which plans to open at 12 a.m. on Friday, Nov. 25, and remain open for 24 hours, said today it's adding $30 million to its fourth-quarter marketing budget. Last year, the retailer spent $113 million on measured media during the fourth quarter, according to Kantar Media. It spends $340 million annually.

"Just like last year, we look at our customer, and she continues to be pressured by many of the things that you're well aware of in her life, and so how she spends her money, she's very thoughtful about that and value is really, really important to her," said Kevin Mansell, Kohl's CEO, during an earnings call with analysts. "So as a result, we just think providing her better value and communicating that is really important. That's why we made the decision to invest more into marketing in the fourth quarter so we could take a real leadership position from a savings perspective for the holiday."

Mr. Mansell acknowledged that the holiday season will be competitive and promotional, saying that increased marketing investment is a big part of the brand's strategy to attract consumers.

"We just recognize that with a weaker sales trend in the first half of the year and ... [because] August continued to be weak, we needed to make a change in terms of how much we invested in marketing to drive traffic," Mr. Mansell said.

Kohl's campaign, "Love to Give, Happy to Save," will emphasize "unprecedented value," as well as its hassle-free return policy and no-exclusion sales. Julie Gardner, chief marketing officer, said spend was increasing "significantly" in areas including broadcast, direct mail, digital and mobile. McCann Erickson is Kohl's agency of record.

Mr. Mansell highlighted Kohl's efforts in digital marketing, telling analysts that the retailer wants to "stay ahead of the curve." As part of Kohl's digital efforts, it is planning nine homepage takeovers on sites such as AOL, MSN and Yahoo. It is also expanding its paid-advertising efforts with Facebook and plans to use targeted online ads.

"We recognize that spending money in categories like digital is very, very important for the future, but we can't expect to get the same [results] that we would get in, let's say, more direct mail or more print," Mr. Mansell said. "But it's the future ... so we made the decision to invest more. It also does a better job of targeting, so we definitely are going to leverage that ."

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