Kohl’s, the Wisconsin-based retailer, is taking a strategic approach to boost its sales by opening Babies R Us shops within its existing stores across the country. By the end of September, the company plans to have 200 of these shops, offering a wide range of baby merchandise, including strollers, car seats, and cribs. This move allows Kohl’s to cater more to young families who are looking to decorate their homes, prepare for back-to-school, or get ready for a new addition. With most of its stores located in suburban strip malls, the convenience factor for busy parents running errands or shopping for groceries is undeniable.
In addition to the baby category, Kohl’s is also expanding its assortment of home decor, gifting, and impulse items. The company’s CEO, Tom Kingsbury, believes that these expanded categories, including Babies R Us, present a significant sales opportunity of over $2 billion in the coming years. However, the declining birth rate in the US poses a challenge for Kohl’s. According to provisional data from the US National Center for Health Statistics, there were only 3.59 million births last year, the lowest number in over 40 years.
To address this challenge, Chief Merchandising Officer Nick Jones showcased the first Babies R Us shop during a store tour in New Jersey. The shop allows customers to see and feel high-end items like strollers, cribs, and high chairs outside of their packaging. It features prominent baby brands such as Hatch, Frida, Graco, and Baby Bjorn. In addition to the physical shops, Kohl’s has also expanded its online offerings for Babies R Us, with twice as much merchandise available on its website compared to the in-store selection.
To appeal to expecting families, Kohl’s plans to introduce more merchandise, including baby apparel from popular brands like Nike. The company is also launching maternity clothing from Motherhood, an exclusive direct-to-consumer brand that will be available only at Kohl’s stores. By offering a diverse range of products and brands, Kohl’s aims to capture the attention of both new and existing customers.
Kohl’s decision to open Babies R Us shops comes at a time when the company is seeking growth drivers. Its net sales have seen a nearly 14% drop over the past five years, and it posted a surprise net loss of $27 million for the fiscal first quarter of this year. The retailer’s shares have declined by 24% in 2021, while the S&P 500 has seen gains of nearly 16% during the same period.
While Kohl’s faces challenges due to changing consumer behavior and increased competition, it believes that the baby category presents an opportunity for growth. Baby gear sales reached $7.5 billion for the 12-month period ending in May, with customers willing to pay for premium items. The market has remained stable despite the declining birth rate, as parents prioritize their child’s health and safety. Additionally, new parents now have a variety of retailers and brands to choose from, as well as universal registries that allow them to select items across different websites.
Kohl’s is making a similar move to what it has done with Sephora beauty shops, which have drawn younger and more diverse customers. By aligning with Babies R Us, Kohl’s aims to tap into the market share left behind by the bankruptcy and store closures of Bed Bath and Beyond, the parent company of Buy Buy Baby.
The relaunch of Babies R Us by Kohl’s will test whether the brand has remained relevant or grown stale. The brand is now owned by WHP Global, a brand management company based in New York City. While tastes have changed since the brand’s heyday in the ’80s and ’90s, Kohl’s and WHP have given Babies R Us a more contemporary look to appeal to modern customers. The shops are decorated with sleek baby photos, departing from the traditional pastels and cartoon mascots associated with the brand.
To further promote the Babies R Us shops, Kohl’s plans to partner with influencers on platforms like Instagram and TikTok. This marketing approach allows the company to reach a wider audience and generate awareness about the new offerings.
In conclusion, Kohl’s is taking a strategic approach to boost its sales by opening Babies R Us shops within its existing stores. By expanding its baby category and enhancing its assortment of home decor and gifting, the company aims to cater more to young families. Despite the declining birth rate, the baby market presents an opportunity for growth, as customers are willing to invest in premium baby gear. Kohl’s decision to open Babies R Us shops aligns with its efforts to attract younger and more diverse customers, similar to its successful partnership with Sephora. By modernizing the brand and leveraging social media influencers, Kohl’s aims to capture the attention of new and existing customers, while also revitalizing the Babies R Us brand.
