Kohl's turns to Facebook to help it bring digital brands to stores
(CNN) -- Kohl's is known for selling big brands like Nike and Levi's. But to draw Millennials to stores, it needs to start offering niche brands with loyal Facebook and Instagram followings.
Kohl's announced Tuesday that it will partner with Facebook. The social media company will help Kohl's select clothing and homegoods' brands to sell in some stores. Facebook, using what it knows about the interests of its users, will work with Kohl's to identify trendy brands on Instagram and Facebook that have never before appeared in Kohl's stores or on its website.
Facebook and its Instagram app are trying to become shopping hubs. Kohl's sees an opportunity to glean insights from the social media company to add brands that got their start online. By using Facebook as a funnel for hip digital brands, Kohl's hopes to create an experience that customers can't replicate at rival stores.
Kohl's is calling its new lineup the "Curated by Kohl's" collection. Kohl's collaboration with a team at Facebook will begin next year.
"Facebook has a wealth of data on consumers and consumer preferences," said Michelle Grant, head of retailing at Euromonitor International. "It's an interesting way to source merchandise."
Usually, national brands pitch merchant teams at retailers to get items on store shelves or merchants scour the market to find big brands. Kohl's is changing up that process and will rely in part on Facebook's expertise to identify brands with loyal customers. Kohl's did not disclose its financial agreement with Facebook.
Facebook provides "an additional opportunity for some brand introductions," Doug Howe, Kohl's chief merchandising officer, said in an interview.
As part of the "Curated by Kohl's" initiative, the company announced that it will begin to sell Adore Me lingerie, Dia & Co. plus-size clothing, Kid Made Modern arts and crafts and other brands at 50 stores beginning in the fall.
Tapping Facebook is unorthodox play for a legacy department store. But it fits within Kohl's CEO Michelle Gass creative approach to refitting Kohl's for the online shopping era.
Under Gass, Kohl's has expanded a relationship with Amazon to accept Amazon customers' return orders for free, even without their shipping box, at all of Kohl's more than 1,100 US stores. Kohl's is also leasing out space to Aldi and Planet Fitness to open up several supermarkets and gyms next to Kohl's locations.
Digital brands at department stores
Kohl's relationship with Facebook is a sign of online shopping bleeding further into physical stores.
Younger shoppers are scooping up niche online clothing and home brands. That trend is forcing traditional retailers like Kohl's, Macy's and Nordstrom to look beyond traditional big brands to draw younger customers. Macy's recently unveiled Story, a new section in more than 30 stores that will change brands and concepts every few months to get customers to keep coming back to see what's new.
"Department stores can't just rely on national brands to drive traffic to their stores anymore," said Euromonitor's Grant. "Retailers need to find new brands that resonate with consumers."
Like Macy's, Kohl's will rotate out the merchandise in the collection each quarter to try to compel customers to return.
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