MILWAUKEE — Kohl’s Corp. is testing small cafes in two of its department stores, another step by the big retailer as it seeks to drive traffic and re-energize revenue growth.
Now serving up cinnamon lattes, caramel macchiatos and all the other fancy versions of the once-humble cuppa joe that have entrenched themselves with American consumers are the Kohl’s Department Stores in two southeastern Wisconsin locations.
The idea: Give the firm’s famously value-conscious shoppers a reason to linger — and perhaps use their Kohl’s Cash on yet another 20 percent-, 30 percent- or 40 percent-off selection.
“You want the customer to dwell more,” Jon Grosso, executive vice president and director of stores for the 1,166-location chain, said this week. “You want them to spend time in the building.”
The cafe venture — besides Caribou Coffee, the outlets offer smoothies, other beverages, cookies and dozens of packaged snacks — is an experiment, but one that the retailer, based in suburban Milwaukee, will be watching closely, and tweaking as necessary.
“We want to test and learn and see what we can do in 2016,” Grosso said. “And then, wherever we expand it, if and when we do, we want to apply those (lessons).”
Now embarked on what it calls the “Greatness Agenda,” which envisions increasing the firm’s sluggish sales by about $2 billion by 2017, Kohl’s has launched a number of initiatives — with the drive shaped in part by the company’s chief merchandizing and customer officer, Michelle Gass, who came to Kohl’s from Starbucks.
Among other things, Kohl’s has revamped the beauty sections in hundreds of locations, joined the array of firms that let customers buy products online but pick them up at stores, and last June opened its first off-price store.
Overall, the approach has provided freedom “to take different avenues and take some smart risks and see what happens,” Grosso said.
But the company still moves at a measured pace, and is hardly in the vanguard with its Kohl’s Cafés. Rival Target Corp., for example, has Starbucks outlets in more than 1,300 of its stores.
One twist with Kohl’s, though: The cafes have almost no seating. The intent, apparently, is that customers will sip as they shop.
That drew questions from two retail consultants who otherwise think Kohl’s is on the right track.
“It could be a good idea,” Anne Brouwer, senior partner at McMillan Doolittle, said of the basic strategy. “ You’d rather have people stay in the store, spend more time, spend more money, relax, have an enjoyable visit, than to leave and go to Starbucks and potentially not come back.”
“What I don’t understand,” Brouwer added, “is how relaxing is it to be shopping . and potentially trying to hang on to a handbag and a toddler and a cup of coffee? Somehow or other that doesn’t sound very relaxing, and it doesn’t sound like it helps me linger.”
Similarly, Joe Pine, co-founder of consulting firm Strategic Horizons and co-author of “The Experience Economy,” said the one piece of advice he would offer Kohl’s is to provide more seating.
Otherwise, count Pine as an enthusiast. People want more than products now; they want experiences, he said. And opening a cafe, he said. is one of the easiest ways to offer an experience.
“I love the idea,” Pine said.
But analyst Paula Rosemblum of Retail Systems Research is a skeptic — and one who sees retail as fundamentally about moving goods.
“Retailers sell things,” she said. “They don’t sell brands.”
“I’d love to see them focus more on product, to be honest,” Rosemblum said.
