Kohl’s going nationwide in returns with Amazon

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Kohl’s going nationwide in returns with Amazon

By Dan Berthiaume - 04/23/2019
The relationship between Kohl's Corp. and Amazon is deepening, with some reports suggesting the online giant could potentially take a stake in the retailer.

Starting in July, all of Kohl’s 1,150-plus stores across 48 states will accept free, unpackaged returns of Amazon purchases. The department store retailer will package and send all returned items to Amazon returns centers on behalf of customers. Kohl’s launched the program at 82 stores in Chicago and Los Angeles in fall 2017.
In addition, in a filing with the Securities and Exchange Commission, Kohl’s said that in connection with the commercial agreement, an Amazon affiliate, Amazon NV Investment Holdings, received a warrant to buy up to 1,747,441 Kohl’s shares, or about 1.1% of the company, reported Women's Wear Daily. The warrant vests over five years, starting in January 2020.

"Upon vesting, the warrant shares may be acquired at an exercise price of $69.68 subject to certain customary anti-dilution provisions,” Kohl's stated in the filing.

Currently, 100 Kohl’s stores in the Los Angeles, Chicago and Milwaukee markets accept eligible Amazon items without a box or label, and return them for customers for any reason, free of charge.

“We are thrilled to bring Amazon Returns at Kohl’s to all of our stores across the country,” said Michelle Gass, Kohl’s CEO. “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. This new service is another example of how Kohl’s is delivering innovation to drive traffic to our stores and bring more relevance to our customers.”

Last month, Kohl’s also announced that it will expand its product relationship with Amazon by carrying Amazon products in more than 200 stores.

In addition to providing a valuable customer service, Kohl’s also appears to be boosting its topline by accepting Amazon returns in stores. Earnest Research has analyzed results of this program in Chicago, where almost all Kohl’s stores accept Amazon returns.

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. And the percentage of new customers — defined as customers that did not shop at Kohl’s in the prior calendar year — is up 9% at Chicago stores in 2018, versus 1% for the rest of the U.S., indicating that the Amazon initiative has driven new customers to store locations.