Will Kohl's Amazon Strategy Pay Off?
When department store chain Kohl's (NYSE: KSS) announced in 2017 that some of its stores would begin accepting returns of merchandise purchased from Amazon.com (NASDAQ: AMZN), investors were shocked but not necessarily discouraged. Anything that brings much-needed foot traffic into its stores is an opportunity worth exploring. That's why the market didn't even flinch in April of this year when Kohl's rolled out the program to all of its 1,100 locations.
It seems the strategy hasn't paid off in spades, though. For the quarter ending in early November, measurably higher foot traffic only led to same-store sales growth of 0.4%, versus expectations of 0.8%. As Fool contributor Rich Duprey noted then, "The problem seems to be that those Amazon customers just aren't buying much after returning their packages."
The idea of one retailer offering customer service for a rival, however, isn't quite dead yet. The real litmus test will come this January. Kohl's is still the centerpiece of the experiment, but a couple of other consumer-facing names will contribute to the research.
Source Fool.com
