Kohl's teaming up with Amazon was called a 'deal with the devil' - but it could turn out to be a brilliant move
- Kohl's entered into a partnership with Amazon in 2017 that included installing Amazon sales kiosks in stores and offering in-store returns for items ordered off its website.
- Some analysts were cautious of the partnership, while others were hopeful.
- New data suggests that the partnership has been successful for both parties, at least in the short term.
When Kohl's and Amazon announced their partnership late last year, analysts were divided on whether it was a good thing for either brand.
The partnership involves select Kohl's stores accepting returns for some purchases bought on Amazon.com, as well as installing Amazon kiosks that show off the e-commerce giant's latest tech gadgets.
While some analysts were optimistic, others were outright skeptical, with some headlines questioning whether Kohl's had made a "deal with the devil."
"Kohl's has to tread a very thin line partnering with Amazon," Cooper Smith, head of Amazon research at the digital business firm L2, told Business Insider in September of 2017. "Retailers like Borders have partnered with Amazon and, much to their demise, it ended up hurting them. History very well could repeat itself here."
New data shows that Kohl's may not have as much to fear as first thought.
According to research by Gordon Haskett, since the partnership began last October, total visits to Kohl's stores with Amazon's return program outperformed nearby stores without the program by about 8.5%. Additionally, the stores had a higher proportion of new customers who had presumably been brought in by the Amazon deal.
Adding to the good news for Kohl's, the time customers stayed in stores with Amazon's pilot remained the same, implying that customers aren't just dropping off a quick return and jetting out the door. The data implies they're actually taking a quick look around, even if that still doesn't mean they're necessarily buying anything.
"The program seems like a home-run for Kohl's," the researchers from Gordon Haskett wrote.
It's worth noting that Chuck Grom, who authored the new research paper, was a fan of Kohl's partnership with Amazon from the start.
"All told, we like the moves Kohl's is taking as it continues to think outside the box and forward think on how to evolve in today's quickly changing backdrop," Grom wrote in a note to investors in September.