Kohl's Corp. on Tuesday announced the opening of its newest e-commerce fulfillment center, in Etna, Ohio.
The Menomonee Falls-based retailer constructed the 1.2 million-square-foot, next-generation facility in an effort to meet growing online sales demand.
It's the company's sixth e-commerce fulfillment center nationwide -- joining others in Monroe, Ohio; San Bernardino, California; Edgewood, Maryland; DeSoto, Texas; and Plainfield, Indiana -- and the fifth to open since 2010, according to SEC filings.
Over the past decade, Kohl's has seen digital sales increase to 40% of total business in 2020, from 4% 2010. Amid the COVID-19 pandemic last year, digital sales jumped 16% over 2019.
Thanks to automation and technology, the new facility is expected to be three times more productive than Kohl’s traditional e-commerce fulfillment centers. Five touches have been removed from the lifecycle of an online order, which boosts efficiency and minimizes costs, according to a news release.
Kohl's designed the fulfillment center based on takeaways from its Indiana facility, which opened in 2017. Improvements were made to allow workers to process, fill and ship orders faster and more efficiently. Construction began in 2019 and was temporarily paused in 2020 due to the COVID-19 pandemic before resuming earlier this year.
The new facility will bring more than 400 new jobs to the Columbus area over the next few months. Kohl's plans to add thousands of seasonal positions later this year to support increased demand during peak times.
"Our investment in a highly efficient sixth e-commerce fulfillment center will meaningfully grow our peak fulfillment capacity," said Paul Gaffney, Kohl’s senior executive vice president, chief technology officer and head of supply chain.
Kohl's e-commerce business is bolstered by its 1,162-store base across 49 states. Stores serve as "fulfillment hubs" where customers can pick up orders and shipments, free of charge. Last year, stores fulfilled 40% of digital orders, thanks to a new contactless curbside pick-up service. The combination of its brick-and-mortar presence and online business is why the company is now considered an omni-channel retailer.
"The new e-commerce fulfillment center supports the company’s initiatives to manage fulfillment costs at a lower level, while further leveraging stores to drive customer pickup and get closer to the customer," according to the release.
As Kohl's continues to navigate ongoing retail industry disruption, activist investors are pushing for a change in leadership. Through a public campaign to replace five of the company’s 12 board directors, the group blames Kohl's current board for underperforming stock, stagnant sales and lost market share — operating issues that arose well before the COVID-19 pandemic, which brought sales down 20% last year, and 10% for the fourth quarter.
Kohl’s argues its board is better equipped to lead the company to long-term growth under a new initiative, which includes driving top-line growth and expanding operating margin by capitalizing on apparel trends, such as active-casual and beauty.