Retail | Kohl’s enlists Amazon as ally in bid to drive store traffic

Shoppers enter a Kohl’s Corp. department store in Chicago, Illinois, U.S., on Sunday, Nov. 6, 2016. Kohl’s is scheduled to release earnings figures on November 10. Photographer: Christopher Dilts/Bloomberg

In a sign of the times, Kohl’s Corp. and Home Depot Inc. are the latest traditional retailers to embrace online giants.

Kohl’s aims to turn an e-commerce threat into an ally by offering Inc. products in some of its stores. Home Depot, meanwhile, will sell goods online via voice commands through Google Home and the Google Express website and mobile app. Wal-Mart Stores Inc. announced a similar pact with Google last month.

In the Kohl’s deal, the department-store chain will open 1,000-square-foot Amazon areas in 10 of its locations, offering gadgets like the Echo voice-activated device and the Fire tablet. The new store-in-store concept, dubbed the Amazon Smart Home Experience, will begin appearing next month.

The partnership lets Kohl’s ride Amazon’s coattails and provides another way to drive traffic to its brick-and-mortar locations. The broader department-store industry has struggled to maintain sales, and the specter of customers defecting to Amazon is seen as a major threat. Same-store sales – a closely watched measure – dropped 0.4 percent at Kohl’s last quarter.

Home Depot faces less pressure from the online realm. It’s been one of the best-performing retailers for several years – fueled by rising home values that have encouraged customers to spend more on renovations. But the deal with Alphabet Inc.’s Google, which takes effect later this year, may give it a way to pick up some additional sales.

The dueling announcements are part of the jockeying by Amazon and Google to gain share in voice-controlled devices. Up until now, Google has struggled to compete with Amazon in this category. To increase its appeal, the search-engine giant recently dropped a USD10 monthly membership fee for the service.

More than 35 million Americans will speak to internet-connected devices at least once a month this year, more than double the number in 2016, according to a May report from research firm EMarketer Inc. About 71 percent will use Echo devices, with the Google Home speaker trailing at 24 percent.

For Amazon, the Kohl’s deal offers another distribution channel to support its rapid expansion. The e-commerce giant just completed its purchase of Whole Foods last month, marking its biggest push yet into the brick-and-mortar world. It also is building out a chain of physical bookstores. Nick Turner, Matt Townsend, Bloomberg

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