Kohl’s kicks off experiment with Amazon
Store-within-a-store debuted Wednesday in Chicago and L.A.
Walk in the first-floor entrance of the Kohl’s store in the neighborhood northwest of downtown Chicago known as Bucktown, and there’s virtually no chance you’ll miss the new Amazon “smart home” shop and its array of Star Trek- worthy digital gear.
It’s all immediately inside the door and prominently marked with the now-familiar Amazon logo — a store-within-a-store that is the first thing anyone popping in to pick up a Sonoma tank top, Under Armour hoodie or Gaiam yoga pants will see.
Which suggests just how important the, for now, small-scale alliance with Amazon is to Kohl’s Corp. In a rapidly evolving environment that has traditional retailers scrambling to hold their ground, let alone grow, why not take a chance on a deal that puts an arch rival — perhaps the arch rival — at your front door?
“The whole retail industry is going through a massive transformation,” Kohl’s soon-to-be CEO Michelle Gass said Tuesday as she showed off the Amazon shop with its Echoes, Fires and Kindles.
“Those who ultimately are going to survive and thrive through this period are going to think differently.”
Give Kohl’s credit for that. By providing Amazon with prime real estate, the Menomonee Falls- based company is offering the online retail giant a physical foothold to promote its increasingly popular smart-home devices that, in turn, conceivably may become a tool for Amazon to sell the mas- sive array of other stuff its customers used to buy in stores such as Kohl’s.
But that is a risk Kohl’s has weighed and is willing to take because it sees a bigger upside — the potential to increase its lagging foot traffic and to set itself apart from brick-and-mortar rivals.
“In terms of us staying relevant and interesting, surprising, engaging, it’s doing things like this, so that in the end we can take market share and win over (the) long term,” said Gass, currently the retailer’s chief merchandising and customer officer.
Amazon smart-home shops debuted Wednesday in 10 Kohl’s stores in Chicago and Los Angeles. The shops, each about 1,000 square feet, are stocked with Amazon devices, most importantly the Echo line of voice-activated virtual assistants that let owners command the functions of their homes like Captain James T. Kirk on the bridge of the Enterprise.
The Echo is by far the market leader in its field, with 15 million devices installed in the U.S., Consumer Intelligence Research Partners recently estimated. Google Home is a distant runner-up with about 5 million units, CIRP estimates.
Consumers can experiment with the Echo, as well as with the Kindle readers and Fire tablets, and see firsthand what they can do — an important tool for Amazon. The company, which recently bought Whole Foods Market, increasingly sees a brick-andmortar presence as a valuable addition to its largely online strategy.
Amazon employees will staff the shops. Sales will be rung up not at the Kohl’s registers but by Amazon. Prices are the same as on Amazon.com.