Kohl's was made for Walmart's grocery customers
By George Anderson
FEBRUARY 27, 2015
While many retailers want their stores to be as far away from a Walmart Supercenter as possible, Kohl's probably wants to be in the very same shopping center.
The reason, according to Pam Goodfellow, consumer insights director at Prosper Insights & Analytics, is that when consumers have finished up shopping for groceries at Walmart, they are most likely to head to Kohl's to buy clothing for their families.
In all, these Walmart shoppers spend up to $7 billion a year on clothing and a "good proportion" of that is going to Kohl's. Over the past decade, Ms. Goodfellow wrote on Forbes.com, the number of consumers that list Walmart as their primary destination for groceries has continued to grow, while those listing it as the main place they buy clothes has waned.
For example, the proportion of Walmart grocery shoppers who buy women's clothes at Kohl's has increased from 3.4 percent in February 2005 to 11.8 percent today, according to Prosper's research. This increase mirrored Kohl's national expansion over the same period when its store count went from 640 to 1,162, based on reporting by the Milwaukee Journal Sentinel.
While retailers employing Hi-Lo pricing models have not fared very well against Walmart in grocery, it is this same strategy that has helped Kohl's gain share of the clothing market, according to Ms. Goodfellow.
"The Kohl's shopper, I think, is one of the most interesting shopper groups to look at because they are 100 percent invested in coupons and promotions and the Kohl's Cash," she told the Milwaukee Journal Sentinel.