- In a quarterly earnings announcement, Kohl’s said that it is seeing incremental traffic in its stores due to the Amazon partnership
Kohl’s recently reported its third-quarter results and they were not stellar. However, Kohl’s is expecting to see Amazon returns have a positive contribution to its operating income this year. Kohl’s chief executive officer Michelle Gass said that the company is leaning into the Amazon Returns service in terms of marketing. And the company is also looking at the partnership as a customer acquisition conversion strategy along with increasing the visibility of its branded credit card.
Kohl’s started accepting returns for Amazon back in July. And if the deal goes according to plan, Kohl’s will see this program as a contribution to the company’s operating income in 2019.
“The program is driving incremental traffic into our stores, and we are particularly encouraged by the disproportionate amount of new customers, which on average are also younger than the typical Kohl’s customer,” said Gass during the earnings conference call via ZDNet. “We are very much looking forward to the holiday season, which will be the first with Amazon Returns in stores nationwide.”
Gass and Kohl’s EVP of Finance Jill Timm did not reveal the financial figures behind the deal. But they did say that the conversion is meeting expectations and it is in line with the Amazon pilot program, which drove more foot traffic into its stores.
Gass pointed out that the company is seeing a disproportionate amount of new customers relative to the number of new customers. And the company also has been seeing younger customers, which is in line with the company’s strategic priorities.
“Over the last two years, we’ve mentioned that we’ve acquired customers in the low double digits during this time frame, and this year we had the unique Amazon Returns partnership that we’re going to be able to capitalize on to actually accelerate that customer,” added Timm via ZDNet.
Kohl’s saw a net income of $123 million on revenue of $4.63 billion for the quarter. This was slightly below analyst expectations. And after Kohl’s cut the full-year EPS target to $4.75-$4.95 from $5.15-$5.45, the company stock price dropped nearly 20%.
“We are pleased to report that our business returned to growth during the third quarter, with a comparable sales increase of 0.4%. The quarter started off positive in August with another successful back-to-school season and ended strong in October,” Gass said in a statement. “We enter the holiday period with momentum and are strategically increasing our investments to take advantage of the unique opportunity to fuel growth and customer acquisition. We believe that investing in the short-term will support our strategies to drive profitable growth over the long-term.”
Kohl’s has been seeing growth in its buy online, pickup in store (BOPUS) initiatives. And most of the gains have been coming from mobile consumers.
