In a statement, the company announced that it would begin rolling out the returns service to all its stores following a trial across 100 stores. “The nationwide rollout of the Amazon Returns program is our single biggest initiative of the year,” said CEO Michelle Gass.
“Our top strategic priority is driving traffic, and this transformational program does just that. It drives customers into our stores, and we are expecting millions to benefit from this service.”
“The dream,” Cowen retail analyst Oliver Chen told the New York Times, “is that it’s a fair but attractive split where that shopper will come in and purchase other items.” He added that the marriage offered the department store a new source of traffic while giving Amazon a broad and convenient network of return stations.
Speaking to the New York Times, Gass added that Kohl’s Amazon bet was based on data from the trial that showed the strategy’s ability to bring in “a new consumer, and we’re bringing in a younger consumer.”
Despite the fact that Amazon’s home market of the US is its most developed, an owned physical presence on the scale of Kohl’s – for relatively complex processes such as returns – would have proved expensive.
In other markets, a physical presence has proved fundamental to the growth of e-commerce. In Brazil, for instance, the nationwide store Magazine Luiza has created an online business to rival Amazon’s in the country, by leveraging an extensive physical network.
The news follows other traditionally out-of-town, big-box retailers looking for new ways to survive. Some, in the case of the clothing retailer Nordstrum, and furniture giant IKEA, are moving to smaller stores in city centres. Again, this strategy situates the online retail experience at the core of both companies’ overall plans, as they offer a new avenue for pick-up and returns.
Meanwhile, both Amazon and Kohl’s returns model indicates a new way of understanding online retail. As the British retailer John Lewis has observed, returns used to be regarded as a sign of failure to convert, but especially in the apparel category they are merely a by-product of a new way for consumers to try multiple sizes.
At the same time, Kohl’s has been working to make its physical spaces more attractive to consumers looking to fulfil several errands in one trip by leasing space to Planet Fitness and the grocery chain Aldi. The Amazon deal can be read as a continuation of this idea.
Sourced from Kohl’s, New York Times, WARC