Kohl’s Being Bought By Amazon?
Kohl's is currently engulfed in a storm of challenges, however, it could be saved by the likes of e-commerce giant Amazon.
It’s no secret that Kohl’s has been embroiled in some of its most tumultuous times as of late. The retail behemoth has been suffering from lackluster performance and plummeting profits stemming largely from an irrelevancy that emerged out of a changing retail landscape. Kohl’s repeated attempts to revitalize its business have flopped. The company then thought selling might have been the answer, only to quickly realize that that maneuver would have meant certain death. However, that’s not to say that Kohl’s will never be acquired by another company. And while Amazon has not yet expressed any particular interest in absorbing Kohl’s and all the assets that go with it, The Street pointed out a very good reason as to why Amazon should be keenly interested in purchasing Kohl’s.
There is one overarching reason why it would behoove Amazon to buy Kohl’s. That reason has everything to do with Amazon’s private brand clothing label. Amazon has been trying to tap into the clothing market via its own label for quite some time. Any quick search for clothing on Amazon’s website will be instantly met with their Amazon Essentials brand at the top of the page. Amazon even offered a subscription (which has since been discontinued) that allowed customers to order a bunch of clothes at once and send back whatever they didn’t like. Despite putting their best foot forward in trying to establish themselves in this age-old market, however, the e-commerce giant has failed miserably.
A big reason for its failure stems directly from the fact that Amazon is lacking a brick-and-mortar presence (that is, give or take a few stores that dot the country’s big cities). It’s very hard to buy clothes online and be certain that they will fit the way you like. Also, clothes tend to look different in pictures than they do in person. This is where Kohl’s comes in. You see, Kohl’s already has established physical locations throughout the country that Amazon can use to sell its clothing. Even in spite of its current woes Kohl’s remains the largest retailer in the nation with 1,162 locations.
By buying Kohl’s, and using it as a facility to sell its clothes Amazon can start to build brand loyalty much easier by fostering that direct relationship with the consumer. Additionally, Kohl’s already has an inherent customer base. Amazon can leverage the trust shoppers already have in Kohl’s to bolster its own brand.
Moreover, should Amazon buy Kohl’s it wouldn’t be just a win for Amazon either. Each party can extract mutual benefits. For starters, the e-commerce titan already has the capital that Kohl’s desperately needs to help in revitalizing itself. Also, being that Amazon is an e-commerce megalith, it can use its industry relevancy to evolve Kohl’s into a business fit for the modern age of retail. There’s also the fact that Amazon and Kohl’s are already working together in some capacity. It’s really a win-win from whatever angle you look at it.
That being said, toying with the idea of Amazon purchasing Kohl’s and all of the potential benefits that would accompany that purchase is just sheer conjecture. Although, it certainly wouldn’t be out of Amazon’s purview to entertain such an idea and then follow through with it. For now, though, Kohl’s will have to continue to weather the storm it’s engulfed in the best that it can.
