Can’t beat Amazon? Then join it… Kohl’s teams up with the marketplace to drive footfall
While many retailers seek to take on Amazon – or sit and scratch their chins and wonder what else to do – one retailer has decided that if it can’t beat Amazon, then it is going to join it.
US department store Kohl’s has become one of a growing number of stores and brands that have decided to team up with Amazon, rather than try and take it on.
Kohl has been reported as saying that it is extending a pilot programme with Amazon that it started in Chicago in 2017 across 81 other stores across the West to sell Amazon products and to accept Amazon returns in its stores.
In an interview with CNBC’s Jim Cramer, Kohl’s Chairman, President and CEO Kevin Mansell said that allowing shoppers to return items purchased on Amazon at Kohl’s stores in a seamless way … and then converting that traffic to Kohl’s shoppers and purchases, is a big idea.
“We’re a few months into it, but we know one thing for sure: the experience is amazing and people are using the service. If the customer responds, they think it’s a great experience, they use the service, but very importantly, it drives incremental traffic, then we’re going to look to expand it”
– Kevin Mansell, Chairman, president and CEO, Kohl’s
The move is an interesting one from Kohl’s point of view as it clearly helps it drive traffic and footfall and, it theory at least, you’d expect some uptick in sales from Amazon returners entering the store. However, is it enough to counter lost sales that are going to Amazon anyway?
And what of Amazon: how much does it need this sort of deal? While the partnership works well for Kohl’s priority of driving traffic and footfall, does it work for Amazon? Mansell admits that Kohl’s results are only half of the equation. Amazon is also tracking how the Kohl’s partnership affects its own business, he said. And if Kohl’s were to ever consider expanding the Amazon capabilities to its 1,000-plus stores, the partnership would have to be mutually beneficial, he added.
Amazon already partners to some degree with Nike and Sears in the US – mainly so that the retailers and brands can sell through the marketplace. Kohl’s marks itself out by looking to help Amazon with returns and sales as well as using Amazon to drive footfall to its stores. This is an interesting spin-off idea from that of retailers and brands using marektplaces to reach their dwindling audiences. Will it work? Only time will tell – and as ever the ball is very much in Amazon’s court.
It is a good idea for Amazon if Amazon lockers are placed in Kohl stores, other than that Amazon will lose some small sales to Kohl from foot traffic. What Amazon should do is to have a small pop up store in every kohl shop, where Amazon can show and sell its own technology such as Alexa and the fire tablets, security cameras being cloud can and it’s recently purchased Ring doorbell and Blink battery operated cameras.
Amazon foremost is a technology company and Amazon needs to showcase its technology hardware along with services such as cloud storage.
If Amazon follows that path with Kohl s then it should be a mutually beneficial arrangement.