Commentary

Kohl's Will Pack, Label And Return Amazon Merchandise At All Stores

Kohl’s is expanding its approach to dealing with the Amazon threat at all 1,100 stores: If you can’t beat ’em, entice folks into your portal by returning their goods for them, even if they’re an unboxed jumble of misfits and regrets.

“The nationwide rollout of the Amazon Returns program is our single biggest initiative of the year,” Kohl’s CEO Michelle Gass says in a statement. “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 company launched the program in a test at 82 stores across Los Angeles and Chicago in October 2017, and later expanded it to the Milwaukee market.

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“It says a lot about modern retail that the ‘single biggest initiative’ out of Kohl's this year is processing Amazon returns at its 1,100+ stores,” tweets  Sapna Maheshwari, stealing a line from her story for The New York Times.

“It’s an interesting marriage because what Kohl’s needs is store traffic, and what Amazon needs is to make customers happier with a place to return their items,” Cowen retail analyst Oliver Chen tells Maheshwari. “The dream is that it’s a fair but attractive split where that shopper will come in and purchase other items.”

Indeed, “New York-based Earnest Research found Chicago stores in the pilot appeared to benefit significantly from the partnership with Seattle-based Amazon,” Kelly Tyko reports for USA Today.

“For all of 2018, the Chicago stores posted year-over-year revenue gains totaling 8%, compared with 2% for the other Kohl's stores, the research firm reported. The Chicago stores also saw a 9% increase in new customers compared with 1% in other Kohl's locations, according to Earnest Research,” Tyko adds.

In response to a tweet by Yahoo Finances’ Brian Sozzi pointing out “investors are very excited” by the potential gain in traffic, Trayce Zimmerman writes: “I went to Kohl's for the first time after Christmas for this easy Amazon return option. It was fast & they did the packaging plus they gave me a Kohl's coupon valid for one week. Otherwise, I would have never even looked around. Super smart.”

Select Whole Foods stores and more than 4,768 UPS Stores nationwide also offer Amazon returns with no box required for most items, according to a post  on Amazon’s blog.At Amazon’s “physical” stores, the items need to be boxed by the consumer.

“National chains have been devising a plethora of ways to accommodate new digital shopping habits, particularly of younger consumers, beyond simply managing their own online pickups and returns at stores. Nordstrom recently established an urban chain of stores, called Nordstrom Local, that do not carry any merchandise. The locations, which are about the size of a Lululemon or Dunkin’ Donuts, are mainly hubs for online pickups and returns,” the NYT’s Maheshwari points out.

“I can’t help thinking that all these package pickup/return ideas (Amazon lockers, Kohl’s partnership, Nordstrom mini-hubs) show a failure to innovate of package delivery companies & USPS,” Bloomberg Opinion columnist Shira Ovide tweets.

Then there’s the human side of the story (at least for the very near future).

“As Gizmodo has noted before, both Amazon and Kohl’s rely on low-paid labor (Kohl’s cashiers make an average of $9 an hour, and Amazon warehouse workers make $15) and have vehemently resisted unionization efforts by staff. So if you do end up going to Kohl’s to make an Amazon return, do try to remember that you’re dealing with generally poorly compensated retail workers that have been sucked into doing more thankless work for a sprawling logistics machine,” writes Tom McKay for Gizmodo

On that note,  Amazon workers at the Shakopee, Minnesota fulfillment center plan are planning a six-hour work stoppage on July 15, the first day of Prime Day. It’s “a sign that labor unrest persists even after the company committed to paying all employees at least $15 an hour last year,” write  Josh Eidelson and Spencer Soper for Bloomberg.

“An Amazon spokesperson claims the company ‘already’ offers what workers are asking for, including ‘excellent pay' and 'great employment opportunities,’” Jon Fingas writes  for Engadget. “We encourage anyone to compare our pay, benefits, and workplace to other retailers and major employers in the Shakopee community and across the country -- and we invite anyone to see for themselves by taking a tour of the facility,” Amazon continues in a statement Fingas quotes in full.

Should you decide to go  to Shakopee …

3 comments about "Kohl's Will Pack, Label And Return Amazon Merchandise At All Stores".
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  1. Ron Kurtz from American Affluence Research Center, July 9, 2019 at 11:28 a.m.

    I wonder if Kohl's has been able to measure the extra costs of offering this service for Amazon customers. If "driving traffic" is Kohl's "top strategic priority" perhaps they could achieve equal or better results at a lower cost by offering laundry/dry cleaning drop off/pick up stations, free food or beverages, or some other product or service.  

  2. Paula Lynn from Who Else Unlimited replied, July 9, 2019 at 3:56 p.m.

    Not the same, not nearly. 

  3. Ron Kurtz from American Affluence Research Center, July 10, 2019 at 11:12 a.m.

    Not sure you are correct Paula, but we won't know in the absence of having better data. Just seems that Kohl's "top strategic priority" raises a lot of questions about effectiveness and cost efficiency. 

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