Kohl's Bulks Up As Rivals Trim

Retailer to Blast Value Message Across Platforms to Lure Budget-Conscious

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NEW YORK (AdAge.com) -- This season it's simply not possible for Kohl's to be too value-oriented, said Julie Gardner, chief marketing officer.

And so, the retailer fired a warning shot by announcing an aggressive, well-funded holiday marketing program to kick off Nov. 3. It will be backed by more spending than last year, when TNS Media Intelligence clocked it in at $158 million in the fourth quarter.
Bold move: Kohl's push is gutsy, considering many retailers are scaling back.
Bold move: Kohl's push is gutsy, considering many retailers are scaling back.

But at a time when the economy is in turmoil and Kohl's own stock price has taken a hit -- shedding nearly half its value between Sept. 8 and Oct. 28, the day before it announced its holiday plans -- the investment is a gutsy one. Many of Kohl's competitors, by contrast, have been cagey about their spending plans, and ad-agency holding companies report that retailers are scaling back.

But Kohl's said it began plotting its approach to the all-important season well before the markets tanked and consumer confidence plunged. That has enabled it to aggressively tout a value message in a variety of media, as well as hold a staggering number of planned sales events. "We know that consumers are not going to spend more this year than they did last year, so our goal was to make sure that we provide relief to consumers and, in the process, grow our market share," said Ms. Gardner. "Our strategy has been to increase spending, be aggressive, and that's how we planned the season from the beginning."

Ms. Gardner said advertising spending for the fourth quarter is up from last year, although she declined to specify by how much. McCann Erickson, New York, is Kohl's agency of record for creative and media buying.

Working for the weekends
"We looked at the allocation of our dollars and planned our sales and our advertising expense going into the fourth quarter so that we would maintain the correct goals that we have from [a selling, general and administrative-expense] standpoint," said Ms. Gardner. "We're very aligned within the organization about the value that marketing has in driving not only traffic into the stores and therefore sales, but in positioning the brand day in and day out."

Direct mail, digital advertising and e-mail marketing will see increased funding and all efforts, including TV and radio spots, will be geared toward weekends. Because consumers, in general, are making fewer trips and combining a variety of errands into one trip, they are more likely to do big shopping excursions on weekends, said Ms. Gardner.

But the question remains: Will Kohl's be able to keep customers lured by low prices over the long term? Ms. Gardner said she believes the retailer will. She said private and exclusive brands will be hyped in three, as opposed to two, TV commercials this year, in an effort to win new fans for Kohl's proprietary labels. The retailer will publicize its Vera Wang, Food Network and Elle magazine relationships, among others, through network and cable advertising buys.

"All of those brands are exclusively at Kohl's, so that really creates a desire to come specifically to Kohl's," said Ms. Gardner. "That, we believe, has a halo effect, certainly, as we go into 2009."

Despite the emphasis on value, the retailer isn't abandoning feel-good messaging that pulls at consumers' heartstrings. Cirque du Soleil characters take center stage in one commercial to help a young boy find the perfect gift for his mom, for example. "It's a really interesting, magical spot," Ms. Gardner said. "Those kinds of deliveries are extremely critical, in addition to value."
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