This morning, Kohl’s announced stronger-than-expected results for Q3. While store sales were “essentially flat for the quarter,” e-commerce sales posted a mid-teen increase.

Strong investments in e-commerce and mobile initiatives have paid off for the value retailer. Here’s our quick take on the call:

Loyalty

Gartner L2’s Digital IQ Index: Department Stores recognizes Kohl’s as one of several retailers that have tender-neutral loyalty programs. The retailer is currently piloting a new next-generation loyalty program that will be rolled out in the next 18 months. With competitors like Nordstrom, Macy’s, and DSW currently introducing tiered loyalty programs, we predict Kohl’s will also start offering a tiered program with select benefits for members at different levels.

Mobile

Mobile played an important role in Kohl’s Q3 results, representing 70% of digital traffic and almost half of digital sales. The brand’s app creates a seamless checkout process for users, allowing customers to easily apply coupons and discounts and pay in store without having to bring their card.

Strategic Partnerships

Kohl’s announced successful early reads on its apparel partnership with POPSUGAR, which launched in September. Since first reporting on the partnership last month, we’ve seen an 11% increase in Kohl’s traffic coming from popsugar.com.

Kohl’s also introduced two iconic toy brands for the holiday season: LEGO and FAO Schwarz. With heightened competition from Amazon, Target, Walmart, and even Michaels, retailers are clamoring to claim a piece of the pie that was left behind by Toys”R”Us. 

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