Kohl's expands genius Amazon-style feature shoppers will love

The retailer has made several savvy changes to upgrade its shopping experience and bring more customers in.

Jun 17, 2024 - 18:30

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Kohl's expands genius Amazon-style feature shoppers will love

One of the hardest parts of being a retailer in the 2020s is maintaining a competitive edge.

When all your peers seem to offer everything that you do, plus perks for paying members and loyal customers, differentiating yourself is difficult.

In this case, a retailer can take one of several strategies to beef up that competitive presence.

Amazon (AMZN) basically invented free and fast shipping, a feature that not many customers previously enjoyed but that now is readily expected. Customers ask themselves: If it doesn't ship for free in two days, is it even worth buying?

Walmart (WMT) followed suit, offering Walmart+ customers shipping that's free and often as fast, with a couple of added benefits, like savings on fuel and access to the streaming service Paramount+.

Target (TGT) , for its part, recently chose to go the paying-membership route. Though it's a little late to the party, it also offers plenty of other options for its customers, some of whom shop at Target specifically because they'd rather not shop at the aforementioned two giants.

It also offers mini in-store shopping experiences. Target now features Ulta (ULTA) stores within its operations, so beauty enthusiasts can visit two of their favorite locations without having to leave those comfortably large brick-and-mortar confines.

A Sephora inside a Kohl's store in Ramsey, N.J.
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Retailers have to develop competitive edges

And with the crumbling of so many legacy retailers, retailers that want to stay afloat must constantly be iterating new solutions that tempt customers through their doors.

One such example is with Kohl's (KSS) , the department store chain located largely outside shopping malls and at suburban strip shopping plazas.

Kohl's was popular in the early- and mid-2000s for its convenience and selection. Busy moms who didn't want to trek to their packed shopping malls and spend a weekend popping in and out of dozens of stores for their families could instead stop by their local Kohl's and find budget-friendly items for kitchen, home, kids, cosmetics and outdoor activities.

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But Kohl's has struggled in recent years with the advent of online shopping. So it did what any resourceful retailer does that lacks the robust e-commerce and fulfillment capabilities of its corporate peers. It partnered.

Kohl's piloted a nationwide program with Amazon in 2019, enabling customers to visit a participating Kohl's location to process their Amazon returns in the hopes that they'd stay to peruse the aisles while they were at it.

Two years later it partnered with LVMH (LVMUY) powerhouse Sephora, bringing pared-down versions of the cosmetics shop inside its walls, in similar hopes that beauty enthusiasts would linger and bring spillover sales.

Kohl's maintains that its partnerships are some of its most successful collaborations to date. Kohl's CEO Tom Kingsbury called the Sephora partnership "a real coup." Kohl's cites the strategy as a central part of its 90% lift in year-over-year sales growth in 2023, and it's aiming for $2 billion in sales by 2025.

Kohl's introduces more smart partnerships

Since Kohl's has seen such success from its partnering with hot brands and stores, it plans to expand those capabilities in 2024.

It said on Thursday, June 13, that it was introducing the Return Drop @ Kohl’s, a feature that enables the retailer to process even more returns quickly for customers at participating locations.

Some of the brands included in the new partnership are popular American ones like Carhartt, Hanes and Levi’s — all especially popular among Gen Z shoppers.

The Return Drop @ Kohl's processes returns easily and does not require labels or packaging in most cases. It's being rolled out to 1,100 Kohl's nationwide and often just requires a QR code, usually provided when a customer processes a return online.

Kohl's is partnering with shipping and fulfillment companies Inmar Post-Purchase Solutions and Narvar to process these returns.

And management has high hopes for the venture.

“Providing shoppers with convenient services is critical to Kohl’s ongoing commitment to the customer experience,” Kohl’s executive vice president of supply chain and logistics, Gregg Barta, said.

“Not only will the Return Drop @ Kohl’s remove friction for customers, but it will also provide operational benefits and efficiencies to participating retailers and brands.”

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