Kohl’s Expands Amazon Returns to All 1,150 Stores in the Lower 48

A year and a half after first testing the program in Los Angeles and Chicago, Kohl’s will start accepting Amazon returns in July for free at its 1,150 stores in the 48 continental U.S. states, even without a box or label.

Kohl’s says that “eligible Amazon items” can be returned free of charge, no matter the reason and regardless of whether they’re boxed for shipping, based on Amazon’s return policy. It will package and send them all back to Amazon returns centers. According to Kohl’s, 80% of the U.S. population lives within 10 miles of one of its stores.

“We are thrilled to bring Amazon Returns at Kohl’s to all of our stores across the country,” said Michelle Gass, Kohl’s CEO in a statement. “Amazon and Kohl’s have a shared passion in providing outstanding customer service, and this unique partnership combines Kohl’s strong nationwide store footprint and omnichannel capabilities with Amazon’s reach and customer loyalty.”

Kohl’s benefits from the ramped-up partnership with increased foot traffic and incremental sales. Amazon wins by consolidating its returns at Kohl’s locations, saving on reverse logistics costs, and perhaps additional purchases as well since some Kohl’s locations feature Amazon boutiques.

Liz Bacelar, CEO of innovation consultancy Current Global, said Earnest Research data showed revenue growth at Kohl’s stores in the Chicago area outpaced the rest of the country a few months after beginning the Amazon returns program. “This is a creative play for traffic for Kohl’s which has already paid off,” Bacelar said.

Bacelar added that Kohl’s has been smart in not just “dumping its SKUs on Amazon” and allowing the ecommerce giant to deeply understand its data.

“Instead, Kohl’s is leveraging Amazon’s online traffic, selling gift cards on the platform and turning them into increased traffic in its stores, which has already increased sales volume,” she said. “So, Kohl’s is using Amazon as a giant billboard and probably also being compensated with handling fees on the side for Amazon’s returns.”

Michelle Engle, senior vice president of marketing at marketing services firm Valassis, said it was a smart move by Kohl’s given the incremental sales gains from the pilot tests.

“As consumers’ demands for convenience continue to grow, expect more retailers following in the steps of Kohl’s,” Engle said. “Partnering with direct-to-consumer brands like Amazon to pull in younger shoppers, they can offer a new in-store experience and provide a level of convenience to drive sales and positively impact profit.”

MCM Musings: This is an interesting play for Kohl’s as Amazon competes with it in a number of merchandise categories including apparel and home goods. But the company sees increased foot traffic in a challenged climate, the incremental sales lift and fees from Amazon as too good to pass up. The partnership also gives Kohl’s a leg up on department store competitors. Meanwhile Amazon is looking for any and every way to reduce its massive shipping costs, which hit $27.7 billion in 2018, up from $21.7 billion the year before. Witness its ongoing and significant investments in shipping and logistics capabilities to add capacity and reduce reliance on outside partners.

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