Amazon a ‘friend’ to department store giant Kohl’s: Michelle Gass

Kohl's CEO Michelle Gass joins 'Influencers with Andy Serwer' to discuss her company's strategic partnership with Amazon.

Video Transcript

- Tell us about the relationship with Amazon now, and are they a friend or a frenemy? Or how does that whole relationship work?

MICHELLE GASS: Yeah. I would definitely put them in the friend category. You know, when we created this relationship a few years ago and started testing-- and I can describe that in a moment-- it definitely got a few questions, like, wait a minute, aren't you aren't you competing with Amazon? Of course, I would say there's plenty of market share to be had, right. There's billions of in the kinds of products we sell.

But a few years ago, I mean, we're looking at the incredible company. They were building the tailwind they had and we have assets they have and they have assets we don't have. We get the store base I keep talking about. Healthy, robust. And another comment to our earlier discussion-- the future of brick and mortar-- it's not just about transacting and buying product. As I mentioned, we're using them to fulfill goods. So they're a omnichannel fulfillment center as well.

And so we've really challenge ourselves to think creatively about all the ways that this physical space can be used and serve our families. So a few years ago, we connected with Amazon and talked about lots of ideas, actually, on how we could bring our complementary strengths. We've got this incredible store base and this consumer base, they have this tremendous reach and loyalty. Is there a win-win in here, and can we think differently and build on each other's strengths?

And so we started testing this idea where, at the core of it, we accept Amazon returns. And one of the insights we have about our customers, Andy, and we knew this from our own experience, customers hate dealing with returns. Packaging up, finding the packing slip, dealing with it, and we have already seen that 90% of our returns happen in the store. So how could we extend that and have that really be a skill of the company that we can leverage into other spaces? And Amazon didn't have the convenience of these 1,200 stores that we offer.

So the service in a nutshell is we take Amazon returns and we make it really easy for the customer. We have a dedicated space. It takes literally seconds to process the return. The big advantage? It's free and the customer doesn't have to pack to that. So literally, they can just walk in with whatever item that maybe they changed their mind on and bring it to Kohl's they're done. And what we get is we get new traffic, and importantly, building a relationship with some new customers. And what we're finding is we are getting new customers and we're seeing a younger customer and those are both very strategically important to us.