(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, No. 18 in the Internet Retailer 2017 Top 500, aims to turn an e-commerce threat into an ally by offering Amazon.com Inc. (No. 1) products in some of its stores. Home Depot (No. 7), meanwhile, will sell goods online via voice commands through Google Home and the Google Express website and mobile app. Wal-Mart Stores Inc. (No. 3) 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 bricks-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% at Kohl’s last quarter.
News of the tie-up helped send Kohl’s shares up as much as 3.1% to $41.63 on Wednesday. The stock had been down 18% this year, battered by retail gloom.
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 chain’s shares rose as much as 1.6% to $155.35 on Wednesday, adding to a 14% gain for the year.
The dueling announcements are part of the jockeying by Amazon and Google to gain share in voice-controlled devices. Until now, Google has struggled to compete with Amazon in this category. To increase its appeal, the search-engine giant recently dropped a $10 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% will use Echo devices, with the Google Home speaker trailing at 24%.
For Amazon, the 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 bricks-and-mortar world. It also is building out a chain of physical bookstores.
The Smart Home Experience will be offered at Kohl’s stores in the Los Angeles and Chicago areas, aiming to be ready in time for holiday shoppers. The idea is to let consumers test out the products—including devices powered by Amazon’s voice assistant Alexa—which can be used to manage entertainment, home security, order products and other tasks.
Still, the partnership will be limited to a fraction of Kohl’s chain. The retailer has more than 1,100 department stores in 49 states. Terms of the Amazon deal weren’t disclosed.Favorite