Amazon Returns Help Power Kohl’s Traffic In Q4

As its marketing plan over the holidays powered customer engagement and a double-digit increase in new customer acquisition, Kohl’s CEO Michelle Gass said the retailer enjoyed increased traffic over the period that was propelled, in part, by its Amazon Returns program. The executive noted in a fourth-quarter earnings conference call that the company was “particularly pleased with how our team managed the surge of post-holiday Amazon returns.”

Gass said that “the Amazon Returns program helped drive positive comps in January.” And, from an innovation perspective, she noted that the company continues to be pleased with the results it sees from Amazon returns. In the call, Gass also noted the company had seen a sequential improvement in traffic in its stores after the nationwide rollout, while it also observed higher levels of younger and new shoppers.

Gass also said the company’s workers deliver an “exceptional customer experience validated by a world-class net promoter score with this program.” The executive noted that the original pilot markets that have been in place for more than two years keep performing very well. “This gives us confidence as we move forward with the nationwide partnership that we have an opportunity to build on our performance,” Gass said.

As reported previously, Kohl’s had planned to start taking returns for Amazon purchases at all of its locations per news last year. The department store retailer will take Amazon items that are “eligible” without a box or label per reports at the time. (That reportedly comes without an additional fee on the part of the customer.) The retailer then packages the purchases before sending them to a return center of the eCommerce merchant.

Active And Digital

Gass also noted in the earnings call that the company asserted the leadership of Kohl’s as an active destination for today’s family. She pointed out that active sales continued to grow in the fourth quarter, powered by footwear and apparel. Active has been an area in which the retailer has invested in via expanded square footage in 160 of its stores, Gass said, while also noting that installation of Adidas launch pads and expanded sizing options such as Under Armour Big And Tall.

“These investments continue to pay off and are also leading to increased access to elevated product from our brand partners,” Gass said. The executive also noted that the retailer continues to power strong growth in its digital business that was higher by double digits in the fourth quarter. She pointed out that mobile and the Kohl’s app continued to the be main growth drivers. Together, they comprised 75 percent of traffic and more than half of its sales.

She also said the company’s beauty investments keep bringing in “promising returns.” Beauty sales were up high single digits in the fourth quarter, with solid growth in digital and in stores. New brand debuts were an important driver of the growth, and the retailer saw strong results in the 12 stores with a new elevated beauty experience. “Beauty remains a large opportunity for Kohl’s, and we will share more of our plans at our investor day,” Gass said.

Kohl’s fourth-quarter results exceeded analyst expectations, with revenues of $6.8 billion and non-GAAP diluted earnings per share of $1.99. Analysts had forecast revenues of $6.5 billion and earnings per share of $1.88 for the fourth quarter.