FPX5008 Data Analytics Assessment 3 PDF

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Kohls: Data Analytics Capella University FPX5008: Applied Business Analytics Professor October 15th, 2020

2 Kohl’s is an omni-channel retailer store with more than 1,100 stores in 49 states (Kohl’s Corporation 2020). The first Kohl’s department store opened in Wisconsin in 1962 (Kohl’s Corporation 2020). Kohls.com launched in 2001, giving Kohl’s an online presence that has grown over the years (Kohl’s Corporation 2020). In 2019, Kohl’s reported over $20 billion in total revenue (Kohl’s Corporation 2020). Kohl’s is well known as a value-shopping experience. Not only do they maintain a series of their own brands, they also offer a wide variety of well-known national brands like Nike, Under Armour, Dockers, KitchenAid, FitBit, Keurig, and more (Kohl’s Corporation 2020). In addition to competitive prices on all brands, Kohl’s offers a private-label credit card, Kohl’s Charge. Kohl’s offers rewards programs to customers through both the Yes2You Rewards loyalty program, and discount coupons called Kohl’s Cash which shoppers earn when making purchases. In 2017, Kohl’s began partnering with Amazon to sell Amazon electronics (e.g. smarthome products) at some stores, and started testing an enhancement to handle Amazon returns at about 80 locations (Earnest Research, 2019). Then, in July of this year, they expanded to handle Amazon returns in over 1100 locations (Earnest Research, 2019). This is part of their ongoing plan to drive foot traffic to stores and bring more relevance to their in-store locations. With this service, Kohl’s accepts eligible Amazon returns without a box or label, packages the items, and sends them back to one of Amazon’s return centers. Initial results from the tests starting in 2017 showed a new customer (customers who did not shop at Kohl’s in the prior year) increase of 9% in test stores versus 1% nationwide (Earnest Research, 2019). Kohl’s is testing additional ways to drive traffic to stores like housing grocery chains like Aldi, or gyms like Planet Fitness (Walton, 2020). Kohl’s hopes customers at the partner locations will also be driven to pick up items at Kohl’s while out. It is hopeful that the partnerships with Amazon and others will continue to help Kohl’s grow, even during times when in-store businesses are struggling.

3 Graphical Representations of Data This scatterplot represents the highest stock price every day for the one year period from 9/23/2019-9/23/2020. The stock reached its highest price of the year on 11/18/2019 at $59.24. From there, it fell sharply likely after holiday sales ended. Prices remained somewhat steady until late February, early March 2020 when the COVID-19 pandemic took hold and many businesses had to shut their doors. In April, after life in the pandemic began to normalize, and businesses re-opened with safety measures in place, prices began slowly increasing again.

Highest Stock Price $70

59.24

$60 $50 $40 $30 $20

11.99

$10 $0

9/ 18 /2 01 9

11 /7 /2 01 9

12 /2 7/ 20 19

2/ 15 /2 02 0

4/ 5/ 20 20

5/ 25 /2 02 0

7/ 14 /2 02 0

9/ 2/ 20 20

10 /2 2/ 20 20

4 This scatterplot represents the lowest stock price every day for the one year period from 9/23/2019-9/23/2020. The low stock prices don’t vary greatly from the high prices, showing a relatively steady daily rate. Again, the highest low price was on 11/18/19, and prices began to slowly increase again after businesses began re-opening. There do not yet appear to be any immediate effects from the Amazon partnership as seen through stock prices.

Lowest Stock Price $70 $60

57.26

$50 $40 $30 $20

10.89

$10 $0

9/ 18 /2 01 9

11 /7 /2 01 9

12 /2 7/ 20 19

2/ 15 /2 02 0

5/ 25 /2 02 0

4/ 5/ 20 20

7/ 14 /2 02 0

9/ 2/ 20 20

10 /2 2/ 20 20

This histogram represents the adjusted close prices for the one year period from 9/23/2019-9/23/2020. The most common adjusted close price is between $21-30, second most frequent between $41-50, and third most frequent between $11-20.

Frequency

Adjusted Close Price 90 80 70 60 50 40 30 20 10 0 10

20

30

40 Price (in USD)

50

60

More

5 This histogram represents the trading volume for the one year period from 9/23/20199/23/2020. Most often, between 2 million and 3 million stocks were traded per day. It is considerably more common for lower volumes to be traded than higher volumes.

Frequency

Trading Volume 50 45 40 35 30 25 20 15 10 5 0 e 00 000 000 000 000 ,000 ,000 ,000 ,000 ,000 ,000 ,000 ,000 ,000 ,000 ,000 ,000 ,000 ,000 ,000 ,000 ,000 ,000 Mor 0 , , , , , 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 00 00 00 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1, 3, 5, 7, 9, 11, 13, 15, 17, 19, 21, 23, 25, 27, 29, 31, 33, 35, 37, 39, 41, 43, 45,

Volume

Descriptive Statistics The average adjusted daily closing price, or mean, was $31.91. When you look at this in combination with the histogram for the same metric, the results align. The mid-point, or median, of the adjusted daily closing prices was $23.51. Since the median is less than the mean, this indicates the data is skewed slightly to the left, which the histogram supports. The mode shows there were multiple adjusted closing prices higher than the mean. Since the standard deviation is relatively low, this shows most of the data is relatively close to the mean.

Mean Median Mode Standard Deviation

Adjusted Daily Closing Price 31.9155 23.5100 46.0293 13.4308

6 The average stock trading volume, or mean, was 7,363,898. The mid-point, or median, of the adjusted daily closing prices was 6,723,450. Since the median is less than the mean, this indicates the data is skewed to the left, which the histogram supports. A mode for this data was not available since no data points repeated. The high standard deviation shows the numbers are not close to the mean.

Mean Median Mode Standard Deviation

Stock Trading Volume 7,363,898 6,723,450 N/A 5,414,248

Conclusion As with many companies, stock prices fell dramatically at the onset of the global pandemic. Unfortunately, many industries have made a full recovery in the stock market, but Kohl’s has not yet returned to its pre-pandemic stock prices. In order to gain back lost ground, Kohl’s needs to concentrate on doing business for the new normal. Some of these changes are already underway. By adapting quickly and leaning into digital solutions, Kohl’s has a great chance of relevance and recovery moving forward. With its partnership with Amazon and others, they’re being very intuitive about ways to do business differently. Additionally, Kohl’s Chief Merchandising Officer, Doug Howe, shares Kohl’s is, “staying really close to consumer trends, being more responsive, and more importantly overall from a corporate, culture perspective, operating more efficiently, leaning into innovation, testing, piloting through these times (Moin, 2020).” Howe continues that the pandemic, “has given us an opportunity to pause, and reflect back about where there are opportunities we could further accelerate (Moin, 2020).” They’ve used this opportunity to evaluate their product offerings and have able to ramp up casual and

7 active wear offerings based on demand. In addition to reducing inventory and offering of lowerperforming brands, they’re taking the opportunity to add more well-known labels, like Lands’ End just in time for outerwear buying season (Moin, 2020). While Kohl’s has been diligent about reducing in-store offerings and creating safe, socially-distance shopping experiences, they maintain that simple things like offering a wide variety of sizes online to make it easier for customers to get what they need. Howe says he thinks the changes will result in a successful holiday shopping season (Moin, 2020). It’s imperative to keep watching the data to determine if these incremental changes are making impacts. The expectation is that stock prices will rise to once again match what they were prior to the pandemic’s beginning earlier this year.

8 References Earnest Research. (2019, April 3). Amazon partnership delivers for Kohl’s. Medium. https://medium.com/earnest-research/amazon-partnership-delivers-for-kohls4d59207ee9a1 Kohl’s Corporation. (2020). Kohl’s 2019 factbook. Kohl’s. https://corporate.kohls.com/content/dam/kohlscorp/investors/landingpage/2019%20Kohls%20Fact%20Book.pdf Moin, D. (2020, October 13). Kohl’s pivots in the pandemic. Yahoo! Finance. https://finance.yahoo.com/news/kohl-pivots-pandemic-044554722.html Walton, C. (2020, August 25). It’s time for Amazon & Kohl’s to consummate their relationship with an Amazon Go partnership. Forbes. https://www.forbes.com/sites/christopherwalton/2020/08/25/its-time-for-amazon--kohlsto-consummate-their-relationship-with-an-amazon-go-partnership/#642a22625d5c

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