Following Strong Holiday Sales, Kohl's Soars Ahead With Drone Spot

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After reporting strong fourth-quarter sales this week, Kohl's is flying forward—literally—with a new spot airing Sunday. The 30-second commercial uses a camera attached to a drone to highlight activewear brands including Nike, Fitbit and Under Armour, around the store. Using such a filming method is a switch for Kohl's, which is working to distinguish itself from competitors by being as innovative as possible—also evidenced by new partnerships with Amazon and grocer Aldi. The spot also highlights the Menomonee Falls, Wisconsin-based retailer's Kohl's Cash loyalty program, another key push for the company.

"In terms of cinematography, it's different than anything we've done," says Greg Revelle, who joined Kohl's as chief marketing officer nearly a year ago after a stint at Best Buy. "We're trying to be original and different and innovative in how we do everything."

Such a strategy appears to be paying off. While the holiday sales period was rosy for most retailers, it was rosier for Kohl's than for many others. The chain reported fourth-quarter sales of $6.8 billion, a 9.2 percent rise over the year-earlier period. Comparable store sales for the quarter were up 6.3 percent—during the fourth quarter of 2016, Kohl's posted a 2.2 percent comparable store sales decline. As part of its holiday campaign, Kohl's aired a high-production value spot featuring a sweeping battleground of gifts and shoppers—as well as the brand's loyalty program, in the hopes of attracting new shoppers.

Those new shoppers turned up. Kohl's said that new customer acquisition growth was in the mid-teens in the fourth quarter. "Our biggest opportunity is introducing new customers to Kohl's," says Revelle. The company is also relying on a new "How to Kohl's" platform, which will exist as a landing page online and extend to messaging around how to style an outfit, how to use Kohl's app, and how to use Kohl's Cash.

Kohl's is also in discussion with Amazon about expanding its pilot program with the giant e-tailer. A handful of Kohl's stores currently feature Amazon shops and more than 80 Kohl's stores accept Amazon returns. In addition, Kohl's is leasing space in 10 stores to grocer Aldi in another test initiative as it strives to compete with Target and Walmart.

Analysts are remaining upbeat on the brand's new strategies.

"We anticipate continued growth in customer acquisition driven by a broader and more encompassing loyalty program," wrote Oliver Chen, a retail analyst at Cowen & Co. He added that as the brand "continues to improve analytics and innovate personalization and digital marketing" it will acquire more customers while lowering costs, resulting in an improved return on investment.

For its new spot, Kohl's worked with Energy BBDO in Chicago, a relationship that dates back to last year.

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