Author: Dan Berthiaume
Source: CSA The Business of Retail
A new study examines the impact accepting returns of items purchased on Amazon has on Kohl’s stores.
In fall 2017, Kohl’s began allowing customers to make free returns of Amazon packages in 82 select brick-and-mortar stores in Chicago and Los Angeles. Kohl’s has since expanded this program to stores in Milwaukee. Earnest Research has analyzed results of this program in Chicago, where almost all Kohl’s stores accept Amazon returns. According to this analysis, store performance definitely sees a positive impact from this e-commerce partnership.
Earnest data indicates that by summer 2018, between 7% and 8% of brick-and-mortar Kohl’s shoppers in Chicago were returning Amazon items in-store. In Q1 2018, revenue growth at Kohl’s stores in Chicago topped 10%, compared to 5% revenue growth at the rest of the retailer’s U.S. stores.
In addition, Earnest data shows that sales, transactions, and customer growth at Kohl’s stores in Chicago during 2018 all outpace the same metrics at Kohl’s stores nationwide in the same time period. Full-year revenue growth in Chicago stores equaled 8%, compared to 2% across the U.S.
Furthermore, transactions at Kohl’s Chicago stores grew 6% and customers increased 4% in 2018. Across the U.S., Kohl’s saw negative growth in these brick-and-mortar metrics: -2% for transactions and -1% for new customers.
Perhaps most notable is the fact that Kohl’s percentage of new customers — defined as customers that did not shop at Kohl’s in the prior calendar year — is up 9% in 2018, versus 1% for the rest of the U.S., indicating that the Amazon initiative has driven new customers to store locations, accomplishing the partnership’s goal.
The Edge by Ascential has publicly predicted that Amazon may attempt to acquire Kohl’s.