Amazon’s invasion of Kohl’s has begun

Starting today, Kohl’s is officially getting in bed with Amazon.

The discount department store is starting to accept returns of Amazon orders at 10 of what will eventually be 82 of its Chicago and Los Angeles stores. Kohl’s has also begun unveiling mini Amazon shops in some its locations, where customers will be able to try out and purchase gadgets like the Amazon Echo and Kindle.

The tie-ups, which were first announced last month, give Amazon added distribution for its growing portfolio of consumer gadgets as well as a free return option for its customers that don’t want to deal with the hassle of packing and shipping orders they don’t want.

For Kohl’s, the moves amount to a risky bet that the additional customer traffic resulting from the deal will outweigh the downside of strengthening Amazon, which has increasingly become a threat to every mid-market and low-price department store.

In an interview with Fortune, Kohl’s soon-to-be CEO Michelle Gass defended the move. “We’re going through one of, if not the, most transformational times in retail, and we have to really think differently,” she said. “The retail market is big so there is plenty of room for Amazon and Kohl’s to co-exist.”

But as Amazon continues to get more aggressive in Kohl’s core business of apparel sales — both through the creation of its own brands and deals with others like Nike — it’s fair to wonder how long a peaceful co-existence will be a reality.

It’s also fair to wonder whether there’s any thinking on Kohl’s part that the partnerships could turn into proof points in a pitch to Amazon on buying the chain.

Source:

https://www.recode.net/2017/10/18/16496098/amazon-invasion-kohl

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