Why Inventory Management Matters

Improving the customer experience

Inventory management is an important part of Kohl’s continued success. It is a key component of the company’s operational efficiency.

Kohl’s has established a long-term plan to reduce inventory each year for the next five years. In 2016, the first year of this plan, inventory was down on a percentage basis in the mid-single digits.

What is behind the approach? The inventory reduction is being driven by new capabilities. These include localizing the assortment by store, operating with agility and speed in Kohl’s proprietary brands, and fulfilling online generated orders from Kohl’s stores.

Through localization, assortments have been tailored to the unique needs of each Kohl’s store. This improves the climate and style relevance by store so that there is less inventory remaining at the end of each selling season.

Kohl’s is making progress in developing and delivering our proprietary brands with greater speed. We can now react to selling patterns to reduce the volume of excess inventory.

As an omnichannel retailer, Kohl’s has invested in technology that provides flexibility based on how customers choose to shop. Orders generated online can be shipped to a customer from a fulfillment center or a store to minimize delivery time and cost to the customer. To meet immediate needs, online orders can be picked up in any of Kohl’s nearly 1,200 stores. This flexibility allows Kohl’s to leverage inventory across channels.

Kohl’s has made great progress in inventory management and will continue to focus on inventory reduction that rewards our shareholders while enhancing the customer experience.