This comes a week before Amazon’s Prime Day, when other retailers such as Target and Walmart run their own deals at the same time and compete for traffic. But Kohl’s is using its brick-and-mortar base and embracing Amazon in a unique way. The retailer also already carries Amazon products in at least 200 of its locations, such as the Echo, Echo Dot and Fire tablets.
“Our top strategic priority is driving traffic, and this transformational program does just that,” said Kohl’s chief executive, Michelle Gass, in a news release. “It drives customers into our stores, and we are expecting millions to benefit from this service.”
Mark Cohen, a retail studies professor at Columbia Business School, said the program is a great idea for Amazon to establish more brick-and-mortar contact. But for Kohl’s, he says, after surviving the decline of competitors such as Sears, J.C. Penney and Macy’s, it’s just an attempt to stay above water.
“I would see Amazon to Kohl’s as analogous of a Trojan horse,” he said, comparing it to Amazon’s 2017 acquisition of Whole Foods. “This feels like another lopsided deal that Amazon has done.”
But retail analyst Neil Saunders is hopeful that the strategy could work to bring in more millennial customers who already use Amazon, but may have missed the generational attachment to physical shopping experiences like at Kohl’s.
“Amazon is such an enormous force already in retail and there are so many places you can return things to, even if it’s just the local post office,” Saunders said. “But I think Kohl’s does need to drive more customers into the store.”
To use the program, customers need to start the return process online, select the Kohl’s drop-off option and check their email for a QR code from Amazon to show inside the store along with the return item. A Kohl’s spokeswoman declined to give details about the processing or costs.
Kohl’s initially launched this option in 2017 in 100 stores in Chicago, Los Angeles and Milwaukee, and at the time chief administrative officer Richard Schepp called the program a strategy for the two companies to leverage each other’s strength.
Kohl’s first-quarter earnings for 2019, released in May, showed a little more than $4 billion in revenue, down almost 3 percent from a year ago, with diluted earnings per share of $0.38. In a conference call, Gass said she expects returns programs and other brand expansions to drive sales in the second half of the year.