Kohl’s (KSS) has joined Apple (AAPL) and Walmart (WMT) in the ranks of companies offering a mobile payment app.
The department store launched Kohl’s Pay on Wednesday, aiming to foster loyalty and wring more business out of its already large cohort of store-card holders. What’s more, by integrating the new app with its Kohl’s charge card and its Yes2You rewards program, Kohl’s is looking to gain a big edge over rivals like J.C. Penney (JCP) and Macy’s (M) by speeding up checkout in stores (an increasingly important consideration for its shoppers) and making it easier to figure out how to apply coupons.
Fortune first reported Kohl’s Pay was in the works in June.
“We want to make it very easy and frictionless, both on our digital properties like our app and our stores,” Kohl’s Chief Technology Officer Ratnakar Lavu told Fortune in an interview. “You used to have to take out your loyalty card, your charge card, and your coupons. Now you just have to take out the app in one step.”
To use Kohl’s Pay, customers who have a Kohl’s charge card need only save the payment information in the Kohl’s app. Once in store, when the customer is ready to pay, he or she selects Kohl’s Pay to bring up a QR code that is then scanned at the register, applying savings offers and other incentives and taking care of the payment all at once.
Kohl’s Pay, in the works for about a year, aims to take advantage of the fact that Kohl’s has 25 million store card holders, far more than its major rivals rivals, and that those shoppers generate as much as 60% of company sales as its most regular and loyal customers. The company has 40 million people in its Yes2You program, and nearly 14 million people have downloaded the Kohl’s shopping app, which lets shoppers browse online and place orders.
The company, which is seeking to get a turnaround back on track after a disastrous second quarter during which comparable sales fell 3.7%, has made it a top priority to combine loyalty, store card and app into an easier, relatively hassle-free tool for shoppers. This ease of use is also aimed at spurring store card adoption, which not only fosters greater loyalty but provides Kohl’s with more data to help it plan inventory and promotions.
“Wrapping loyalty programs together allows us to move customers up through Yes2You and credit card combos that would lead to higher engagement and higher sales,” CEO Kevin Mansell told investors in August.
The goals are reminiscent of those of Walmart (WMT), which finished rolling out its Walmart Pay app in July. The goal there was not to compete with Apple Pay, since Walmart Pay wouldn’t be useable at other chains, but rather to improve checkout and offer convenience.
And as was the case with Walmart’s app, the Kohl’s Pay app is primarily aimed at making the overall shopping app stickier, making shopper defections less likely.
