The brilliance of Kohl's OR What's in a name
 

CP and I had an interesting conversation over the weekend after we bought a new purse and new wallet respectively. We both got them from Kohl's and they were both by the brand "Relic". Impressed with the price to quality/style ratio, CP went online looking for more stuff by Relic. She wasn't finding anything, other than links back to Kohl's or to EBay, to which I said, "Of course not, it's one of the Kohl's brands, like Croft and Barrow or Axis."

This was a revelation for CP. I had been aware of it for a while, but it even took me many shopping trips to Kohl's to suddenly realize that 90% of the items were of these brands...and that I've never seen the brands anywhere else.

The conversation made us realize just how good Kohl's is at what they do. First off, the brand names are perfect. They sound like department store brands, the kind of name that makes you assume it's been around forever. "Croft & Barrow", "Urban Pipeline", "Relic" (is that a play on Fossil, by chance?). But, at the same time, they're unassuming names, so the focus isn't on the brand of the clothing, but on Kohl's as a brand. By stocking mostly their own brands, they're able to keep costs down for higher quality items. Unlike Target or Walmart, who keep costs down by paying other companies to do things cheeply, they do things well and keep the profits.

But here's the real interesting conclusion we came to. The real secret is to keep the demand for the individual brands out of the spotlight. Because once any sort of brand loyalty develops, then people are going to want that brand from other sources. They'll want to go online and get it from Amazon, they'll want to see it at Ross or wherever. All of a sudden, if the public gets a whiff of that kind of branding, a business model switch is necessary. It become vital to "franchise" the brand, which is a HUGE risk for Kohl's. They're small, and their business model depends on loyalty to the store. Once that bubble bursts, they would be forced to compete with the big boys, their costs would surge as they'd have to split their efforts between the branding of the store and the branding of the merchandise. And they'd likely have to start looking outside of their own infrastructure to keep up with expanding demand, thus risking the quality of the merchandise. It's sad, but it really would be the only reasonable business model at that point.

So color me impressed with their ability to walk that thin line. Lord knows they've created a loyal customer in me, simply by providing quality and style at reasonable prices.

All major stores do this. Craftsman, Amanna, Greatland, Mossimo, there are THOUSANDS of "brands" that re "exclusive" to big stores.

Wht is interesting to me, is that all these "exclusive" brands are ultimately outsourced offshore where competing brands may well be manufactured by the same company.

There was a great essay in a Granta awhile back about the evolution of various manufacturers of Toy trains and how overtime, they were all manufactured in the same Chinese plant where they were just branded and packaged differently.

Now the brand is probably associated with a design team somewhere, but I wonder to what extent that is outsourced as well. I know Target and K-mart have been trying to link their brands to well known designers (e.g. Michael Graves) as a strategy, which I think has been working in thier favor.

It's like when the Simpsons went to the knock off store looking for TVs. One of the brands was Sorny.
:D

Craftsman, Mossimo, and I believe Greatland (dunno about Amanna) can all be found in stores other than their original. Yes, they started that way, but those brands were marketed as brands and eventually franchised out. The Craftsman name, for example, was pushed...and look what happened to Sears. It almost died in the early 90s once demand for their exclusive brands outpaced demand for the store. Now they're back, but have slid in terms of brand loyalty. I believe that's what Kohl's is trying to avoid.

With Kohl's I think it's more than just the design team. Certainly they've got some oversees deals with independent manufacturers to do the assembly work, but from the research I've done, the brands are wholly Kohl's-owned. Unlike Target that has to pen a licensing deal to sell those designer names, as well as share in profits, Kohl's owns the whole shebang, lowering overhead and keeping a larger chunk of the sale. Thus, more control over quality and price.

I love Kohls.

That is all.

Oh and Mossimo almost died out until Target started selling it. I remember Mossimo being the brand to have in 7th grade. That, Esprit an Guess.

There's a Kohl's near us. I should check it out. (The only problem is that it's in a really, really sketchy mall.)

Then I suggest waiting until late at night on a Wednesday. Be sure to wear your Yankees jersey and slap that "W for Emperor" bumper sticker on.

I guess I wonder what the "whole shebang" really is. It's one thing to own the brand and yet another to own the stuff that makes the brand valuable. Are their designers in house? or is Kohl's genius really in their procurement strategy (ability to purchase quality good cheeply)?

And that is what happened with Craftsmen et. al. These are older, more mature names. The same thing will (probably) happen with Kohl's over time as well.

And that same slide is what Sear's tried to avoid themselves. They just came to realize (as will Kohl's at some point) that their developed name matured to the point where they can make more money by cross-selling it through other venues.

Kohls isn't doing anything new and different. There are lots of "hidden" brands that are owned by stores. They aren't unique in any way except their so called "brand". They all do knock-offs of popular designer items and save a whole hell of a lot on the creative aspect. They just slap a lable on them to ive them credibility.

This is common in most any current manufacturing industry. Food products are another segment that has the same product packaged and priced differently to lure all different markets of consumers.

Kohls is just another Target, K-Mart, Sears, Walmart or even Costco - they are just re-branding to appeal to a different audience.

I suppose someone in the clothing industry would be better at answering that question, as even the Kohl's corporate site doesn't offer that much insight. But in such a competative marketplace where actual manufacturing costs have bottomed out, and are probably rising with the increased scrutiny of working conditions, my presumption is that the most likely way to keep costs down is to keep as much of the operation in-house under a single umbrella. Even companies that "own" their brands, but let them run as independent business units have increased costs due to the larger corporate structure. The tighter to the vest Kohl's keeps its brands, the better chance they have to stay in the little niche between Target and Robbinson's May that they've carved for themselves.

I've lived on cheap knock-offs for my entire life. I was the kid in Pro-Wings from Payless and supposed fashion from Target. You could always tell these products were cheap, because they looked cheap and fell apart on you.

Kohls' inhouse brands are high quality products, made by some apparently good designers. The branding is done so well that I didn't even realize they were Kohls' brands. The labeling and packaging is top notch and blends seamlessly with the brands already stuck in your head. The quality is often indistinguishible from their counterparts.

I have never found anything store brand at Target, Kmart or Walmart that comes close to the airtight job Kohls does with its brands.

Just one more thought on this. The brilliance to me lies not in the exclusivity, but in the low-profile. Yes, all stores have their own brands...but they market them. They try to make the brand recognizeable to theoretically draw you in. The end result of that is an eventual undermining of your store brand, as people become loyal to the merchandise, not the provider. Sure, it's a business model that can be made to work, but it puts you into the most competetive space in that industry. Whereas, especially with more and more stores being glommed together via buyouts, the world of "department stores" is a much smaller competetive space than the world of "clothing brands".

So really, what struck us, was how unassuming, yet comfortable and familiar the Kohl's brand names are. It's something that I'm rather impressed by. Their marketing department (or whomever named the brands) really nailed it on the head. Brand names that are chamellion like in nature, that stradle the line between recognizeable and blending into the background. Names (and logos...their logos are equally good) that instantly speak of their own legitamacy, that, even though you've never actually heard of them, you might as well have. All this without standing out as either unique, or as knock-offs. They AREN'T like "Sorny", which is an obvious attempt to sound like Sony. They sound like their own, legitimate brands.

And, you are obviously the market they are going for. It's working quite nicely.

To me, it is obvious that they are just puting a brand on a run-of-the-fashion-mill product because people feel comfortable with having a "brand" and the perception of quality that comes from having a name attached to it. There's nothin wron with that because, it works for them.

My personal experience with Kohls (i've purchased a total of 4 items from there) is that their stuff is not very high quality, not too trendy, but is servicable for a functioning period of time. There's nothing wrong with their product, it just isn't anything new and different in the broad sense of the fashion market. But, the methods they are using are not unusual at all.

I feel like I'm back in a branding meeting.

It's not like I have illusions that they are of the highest quality. But compared to the crap one usually gets at those prices, they're exceptional. When I pay under $15 for a shirt, I don't expect the best quality, nor the most fashionable. But neither have I expected, in the past, the quality that Kohl's offers. It's what Target used to be...better than Pic-n-Save with only nominally higher prices. Target's slipped down a notch, in my experience, while Kohl's has filled in their old nitch, but at a step in quality above, even.

I would say that Taret and Kohls are comparable in quality, however, Target is trying to appeal to the fashionista where Kohls is appealing to those who like conservative basics. I think they are both being successful at this, however, I wonder how long Kohls will survive. It seems the era of the mid-level department stores is coming to and end. The lower-end has had lots of trouble lately as well. I wonder how long the Targets, Kohls and Mervyns of this world will last. I think Target is doing the best job of carving out the much needed irreplacable niche. They've injected more "identity" into their overall brand than some of the other stores.

If you pay the premium for the items with the designer name, yes they match Kohl's quality. But cost-for-cost, Target's quality on their budget items (which was their staple) has slipped tremendously. Target seems to have created a gulf between "cheap crap" and "pricier mid-range stuff". It's one or the other there. Kohl's has swooped in and filled that gap with "cheaper mid-range stuff".

I think Kohls will run Mervyns out of business. When the Kohls in HB opened the Mervyns in that center lost a ton of business and never gained it back. Even with Bella Terra open Mervyns is still dead while Kohls is hopping.

Across the street from me is another set of Mervyns and Kohls. Again, Mervyns is dead while Kohls is hopping.

I don't see the mid-level department store fading. I think the consumer is recognizing that they can get good quality for not a fortune, and are choosing their stores accordingly. While the age of charge it spend spend live beyond your means is still alive and well a new generation of fiscally consertative people are coming into play, a generation who do not want to spend $85+ on a pair of jeans. This generation is a mix of people coming of age and also those who have changed their financial ways.

I don't ever see those who want decent clothes at decent prices ever having to choose between Target/Wal-Mart and Nordstroms.

And I agree about the quality of Target stuff slipping. I used to be able to go there and find come cute stuff that would last awhile. The last clothing I bought from them fell apart after a month. For the price you can get better stuff at ON.

By Mid-level department stores, I was refering to the May Company, Macy's, Robinson's, Buffums, Bullocks, Marshall Fields, Fielines, JC Penny ilk that populated and anchored the malls. Most of those are either gone or consolidated into one big mega company. As a result, the ones that are left are bland bland bland and expensive and the less expensive stores are just as bland.

I think Target gets the edge because they carry other houssehold products that the Kohls/Mervyns stores don't carry. That's really the oly reason I end up there - that and their prices and selection are good.

We need a Khols- sounds like a cool store.

NA- I was telling a client about that store you took us to at the Grove, but for the life of me I couldn't remember the name. I told her it started with an 'A' , but all I could think of was Apostrophe or Apothecary. Last night, around 2:00, I was reading and all of a sudden I thought "Anthropology"- that's it, right?

Anthropologie? I'm addicted to their catalogs! Very Swanky!

That's it. Anthropologie. Wonderful clothes and household items that have a vintage style and loads of character but that don't have a vintage price. The only deals you get there are on sale, and even then.......

But, it's a great place to go for inspiration that you can then recreate from other, less expensive places.....sometimes.....if you're lucky.

Other times, I just bite the bullet and buy that one somewhat unique but expensive item that will make the other bland things look less bland.

I'm very anti-bland. ;)

Thanks for clarifying.

Robinsons was bought out by May Company then Robinsons May was bought out by Macys. 3 seperate down into 1. Bullocks was also bought out by Macys as was Filenes. It appears Marshall Fields was too (and it looks like Target and Mervyns were sold off).

Wow, all we're going to have is Macys. I don't even like Macys. Bleh.

As long as Wal-Mart doesn't buy Target ;)

I was going to add that I rarely buy from them because of the *gasp!* prices...but I've copied many MANY personal and household looks! I try to buy a little something (eyeglasses case, scarf) once a year so I can keep getting that crack I mean catalog in the mail. :D

I don't find Kohl's to be that high quality. I don't shop for my clothes there, but their infant/toddler clothes suck for the most part. Bad sizing, poorly assembled and unfashionable. Target definitely wins in that department.

I did go to Kohl's last Black Friday and got huge, soft, comfy bath towels for $3/piece. I've also found great deals there on name brand shoes, carpet cleaners, dishware, etc. So I like it, but it doesn't suit all my needs.

I wanted to shop at Kohls, and I spent some time trying stuff on. I liked some of their styles. Unfortunately, there's not one top in Kohls that will fit me.

I thought Kohls was a hardware store (I don't think I've ever been in one). Apparently I was wrong unless you're all wearing overalls or something.

Didn't you hear, Alex? Overalls are the new LoT uniform.

(Since when does Home Depot sell overalls?)

I bet you could get a rather extravagent tool belt that would provide as much coverage

I'm confused. I'm positive I've been seeing Relic brand in J.C. Penney for years before Kohl's was even around.

I've never gone into Kohl's even though there's one close by. Their ads, those color inserts that fall out of the newspaper, say "we're crappier than Mervyn's" to me.

But I'm no fashionista, I shop at Penney's.

The best example of private label branding is Trader Joes. Their stratigies and products were often discussed in meetings with brand managers when I was the marketing manager for a major food service distributor. Food retailers and distributors were some of the first to offer "exclusive" brands. Trader Joes has taken that to a whole new level in that arena.

MOST other retailers now have their own "private lable" products that many people don't even realize they aren't buying a national brand when purchasing. Macy's hip clothing line, INC is their own brand, but most people don't even realize that when purchasing and expect the quality to be as high as the other manufacturer brands in the department next door.

It's a fascinating area of marketing and one that is changing quickly. Over 5 years, my job became more and more about marketing our own exclusive brands while still walking a fine line with major manufacturers (who cut us the sweetest deals and brough in the majority of my marketing income).

I don't know about other industries but in mine we called it white labelling. We built a product, sold it to a bunch of small banks who each sold it as their own product but we provided all the back-end.

Hmm, interesting. I suppose Kohl's just jumped on the fast-track in that direction. I guess what made it seem to stick out more than others to me is the ratio of private brand to national brand at Kohl's. It's almost nothing but, with national brands getting a rack or two at most in most departments (Dockers and Levis being the exception in the Men's department). The private brands dominate Kohl's real estate and catalog space.

I suppose I need to extend my praise beyond Kohl's. Really, the initial thing we were impressed by was less the overall marketing strategy than the one detail of the naming. It's got to be hard to come up with brand names that fit so neatly into the American psyche without sounding like a cheap knock-off brand.

Most brands fit so seamlessly into the psyche that most people don't even know that it is an exclusive brand.

Yes, I often expect the cars they sell at Costco to have the Kirkland name on them somewhere... :D

Cars are another great example of branding stratigies. Same car with slight modifications appeal to different segments of the market.

Note: it's not "store brand" or "generic," it's an "exclusive brand."

Yes, you MUST use the proper nomenclature. They trained my well at my company (as I responsible for training 200+ sales people).

Can I tell you again how much I love pet sitting?

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