Kohl’s Teams Up With Amazon on Shop-in-Shops

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With Amazon’s purchase of Whole Foods, shopping center and mall property owners rejoiced at what they saw as a huge endorsement of physical retail locations.

Those same execs should also be feeling pretty good about the e-commerce giant’s latest move: Kohl’s will be launching Amazon shops inside select stores.

Dubbed the Amazon Smart Home Experience, the shops will measure 1,000 square feet and offer the full range of Amazon smart products, including Echo, Fire TV and tablets. The area will be staffed by Amazon employees, who can speak to each product’s features. Shoppers will also be able to schedule home visits where an Amazon expert will help assess their needs and set up the products. Finally, Kohl’s consumers can schedule an array of services like cleaning and plumbing through Amazon Home Services.

[Read about other online/in-store tie-ups: Walmart Enables Voice Shopping With Google Partnership]

“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. “Kohl’s and Amazon share a customer obsession and we’ve joined together to leverage each other’s strengths and deliver a great experience customers can only find at Kohl’s.”

Kohl’s has plans for 10 Amazon shops, with the first two opening in Chicago and Los Angeles next month.

While the first reaction for some might be that the new deal is akin to sleeping with the enemy, others see it as a way for Kohl’s to add dimension—and hopefully, shoppers.

“This is a smart move, and puts Kohl’s ahead of its department store peers (many of which are focusing less on the electronics category), as the retailer now boasts a unique, differentiated traffic driver that sets them apart from the pack,” Jefferies analyst Randal Konik wrote in a research note.

Citi analysts said Kohl’s could take this relationship even further. Just look at the Amazon lockers that have sprung up in Whole Foods. A similar set up in Kohl’s, the analysts said, could provide yet another reason for consumers to pop into the department store on a regular basis. And those additional stops could add up to additional sales once they’re in there.

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