Is Kohl’s giving away the store to Amazon?
It’s complicated. That might explain the current state of mind among retailers that seem increasingly preoccupied with Amazon.com. On one hand, the e-tail giant represents a competitive threat with disruptive business practices and growing market share in categories from apparel to toys. On the other hand, it also offers retailers a selling platform and products to which millions of customers are drawn.
Some retailers attempting to slow Amazon’s advance have begun pulling their business from the Amazon Web Services (AWS) cloud operation. Others such as Walmart have pressured technology vendors to do the same. The argument is that AWS profits are used to subsidize Amazon’s efforts to undercut competitors on price and delivery services.
While most retailers try to come up with responses to blunt Amazon’s forward attack, many are also supporting it by selling the Echo voice-activated speaker line and other devices such as Fire and Kindle. Best Buy, Target and Staples fall into this camp.
Going one step further is Kohl’s, which announced it is opening Amazon smart home experience shops inside 10 stores in the Chicago and Los Angeles markets next month. Kohl’s customers will be able to purchase devices such as the Amazon Echo along with accessories and services directly from Amazon in the shops.
“We are thrilled to offer a unique new way for customers to try out our lineup of Alexa-enabled Amazon devices, learn more about our smart home services from Amazon experts and then buy those items directly from Amazon,” said Dave Zimmer, vice president, sales and marketing, Amazon Devices.
“We believe in the power of our store portfolio and know that our future as a best-in-class omnichannel retailer will be driven by how inventive, compelling and unique we can make our store experience,” said Michelle Gass, Kohl’s chief merchandising and customer officer.
Bankers working in mergers and acquisitions report receiving a noticeable increase in retail clients asking them to contact Amazon to see if the e-tailing giant might have an interest in acquiring their companies, according to a Financial Times report. The uptick follows Amazon’s recent acquisition of Whole Foods Market.
- Kohl’s Announces New Amazon Smart Home Experience at Kohl’s Stores – Kohl’s
- Kohl’s is the latest retailer to partner with Amazon, selling Echo devices in its stores – CNBC
- Retailers to Amazon: pick me, pick me – Financial Times
DISCUSSION QUESTIONS: Is Kohl’s making a good or bad decision in opening Amazon smart home experience shops inside 10 of its stores? Why do you think Kohl’s is allowing sales to be made directly to Amazon instead of through its own system?