Selling with the Enemy? Kohl's To Open in-store Amazon Shops
Amazon has long been blamed for the falling fortunes of department stores. Now, some of them are teaming up with the e-commerce giant.
Kohl's said Wednesday that it will open Amazon shops in 10 of its department stores that will sell Amazon Echos, Fire tablets and other gadgets. The deal comes just a few months after the owner of Sears and Kmart said it would sell its Kenmore-branded appliances on Amazon.com for the first time.
The partnership gives Kohl's a way to differentiate itself from rival department stores and lure in shoppers looking to buy electronics. For Amazon, it gets its devices in front of more people to touch and try them.
"It is a smart move for both companies," analysts at Jeffries said. "They always say you should keep your enemies closer."
Department stores have struggled as more people shop online or at discount stores. Kohl's, Macy's and Dillard's all reported a drop in a key sales figure last month for their latest quarters.
But despite the growth of online shopping, most retail transactions still take place in physical stores -- and Seattle-based Amazon.com Inc. doesn't seem to want to miss out. It has opened 11 bookstores in two years and recently bought grocer Whole Foods, allowing it to sell the Amazon Echo voice-activated device next to organic grapes and corn in its more than 460 stores.
Kohl's said it will open the 1,000-square-foot Amazon areas next month within its Chicago and Los Angeles stores. The companies did not provide financial details of the deal, but said the new sections will be staffed by Amazon employees. Shoppers will be able to hire a plumber or housekeeper through Amazon. And they can also have an Amazon employee come to their home and install a device or suggest smart home products to buy. Best Buy recently launched a similar program, which sends its employees to customer's homes to recommend electronics.
Analysts at Citi said they hope Kohl's can add more Amazon services in its stores, like package pickup or drop-off, which could give people a reason to go into Kohl's stores more frequently. "Perhaps this could be that start of a broader partnership," the Citi analysts said.
Shares of Menomonee Falls, Wisconsin-based Kohl's Corp. soared 5 percent to close at $42.37 Wednesday.
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