Kohl’s embraces Amazon presence
RETAIL Store to open Amazon ‘shops’ at 10 locations
In a sign of the times, Kohl’s Corp. and Home Depot Inc. are the latest traditional retailers to embrace online giants.
Kohl’s aims to turn an ecommerce threat into an ally by offering Amazon. com Inc. products in some of its stores. Home Depot, meanwhile, will sell goods online via voice commands through Google Home and the Google Express website and mobile app. Wal-Mart Stores Inc. announced a similar pact with Google last month.
In the Kohl’s deal, the department-store chain will open 1,000-square-foot Amazon areas in 10 of its locations, offering gadgets like the Echo voice-activated device and the Fire tablet. The new store- in- store concept, dubbed the Amazon Smart Home Experience, will begin appearing next month.
The partnership lets Kohl’s ride Amazon’s coattails and provides another way to drive traffic to its brick-and-mortar locations. The broader department-store industry has struggled to maintain sales, and the spectre of customers defecting to Amazon is seen as a major threat. Same-store sales — a closely watched measure — dropped 0.4 per cent at Kohl’s last quarter.
News of the tie-up helped send Kohl’s shares up 4.9 per cent to US$ 42.37 on Wednesday. The stock had been down 18 per cent this year, battered by retail gloom.
The Kohl’s announcement, while financially immaterial, may end up foreshadowing a larger relationship in the future, Mark Altschwager said in a research note. In fact, the department- store chain could become an acquisition target for e-commerce giant, he said.
Altschwager cited Kohl’s “off- mall” status: Its stores are often in close proximity to supermarkets and have excess space that could be repurposed to serve Amazon’s distribution network.
Home Depot faces less pressure from the online realm. It’s been one of the best-performing retailers for several years — fuelled by rising home values that have encouraged customers to spend more on renovations. But the deal with Alphabet Inc.’s Google, which takes effect later this year, may give it a way to pick up some additional sales.
The chain’s shares rose 2.4 per cent to US$156.56 on Wednesday, adding to a 14 per cent gain for the year.
The duelling announcements are part of the jockeying by Amazon and Google to gain share in voice-controlled devices.
More t han 35 million Americans will speak to internet- connected devices at least once a month this year, more than double the number in 2016, according to a May report from research firm EMarketer Inc. About 71 per cent will use Echo devices, with the Google Home speaker trailing at 24 per cent.