The U.S. retail sector is looking just fine for 2019 — as long as it’s not inside a shopping mall. However, Target and Kohl’s are profiting. Let’s see what are doing right!
Shares of Target and Kohl’s jumped after both retailers gave optimistic profit projections for the current year.
The companies, which traditionally occupy big-box locations in strip malls, are showing how to defend market share in the age of Amazon.com.
Target has introduced private brands and expanded its online capabilities with offers like expedited shipping and in-store pickups.
Kohl’s has drop-off locations for returned goods purchased, while it also sells Amazon products.
Best Buy and Walmart, two other big-box giants without a big mall presence, also impressed investors.
The outlook is darker for mall-based department stores and apparel chains.
Location is key, and space in a mall is just not cutting it for most retailers.
Consumers also prefer the faster shopping in the relatively smaller format of a Kohl’s to the more sprawling mall department stores.
Target shares are up as much as 5.3 percent and Kohl’s as much as 7.9 percent.
The two companies stand out because of their “product differentiation, customer service and innovation.
Off-mall is a better place to be in retail, unless you’re in malls that already reinvented themselves.
Mall-based department stores who fail to innovate are dragging down the malls with them. It comes down to the fact that Target and Kohl’s are figuring it out.
If they can do it, why can’t other retailers?