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August 2, 2024

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Is Accepting Amazon Returns Paying Off for Stores?

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A Washington Post article claims programs enabling Amazon customers to return merchandise to Kohl’s, Staples, Whole Foods, Amazon Fresh, and The UPS Store locations for free are “turning store associates’ jobs into a retail horror story.”

Store workers told the newspaper that Amazon package returners — reportedly tagged as “Amazombies” by associates — have “become a plague on their working lives, wasting staff time without increasing revenue while creating long lines, fraying tempers, and generating piles of boxes and plastic waste.”

The report detailed the hours spent scanning, labeling, bagging, and boxing returns for pickup, with some locations seeing hundreds of returns a day. Some returnees — known as bracketers — bring over a dozen returns at a time after purchasing multiple versions of an item on Amazon with the intention of keeping only one and returning the rest.

Many store associates feel they’re absorbing the brunt of customer-service frustration for Amazon, a company they don’t directly work for.

The report highlighted a petition that started last year and has been signed by nearly 5,000 Staples workers calling for more staffing or an end to the Amazon partnership. The petition states, “We simply cannot perform our jobs because of lines of Amazon returns. They brought in more foot traffic, but there are ways to do that without strengthening our greatest competitor and throwing away our productivity.”

The Washington Post article also noted that activist shareholders since 2021 have expressed skepticism over Kohl’s partnership with Amazon. The group, led by Macellum Advisors, wrote in a press release, “From an outside perspective, we have seen the program increase SG&A and yet revenue has seen little if any observable benefit.”

Regardless, most coverage of Amazon’s in-store returns program in recent years has highlighted positive traffic benefits for retailers participating in the program.

Kohl’s, which began testing the program in 2017 and rolled it out nationwide in 2019, indicated that at least 2 million new customers visited Kohl’s stores in 2020 due to its acceptance of Amazon returns, with about a third being millennials. Last year, Kohl’s CFO Jill Timm said in an earnings call that accepting Amazon returns continued to support efforts to drive traffic.

When announcing the expansion of Amazon returns to all Staples’ locations in June 2023 after a pilot, Craig Grayson, SVP of services at Staples US Retail, said in a statement, “Our suite of in store services continues to expand. We look forward to offering a fast and convenient return experience while showcasing our evolution to Amazon customers.”

In revealing last October that Petco was piloting an Amazon returns program, GeekWire said that for retailers, “inking these deals with Amazon helps bring customers into their stories — though after they’ve bought products from their retail rival. Some offer in-store coupons to Amazon customers making returns at their store.”

UPS reportedly charges Amazon for the service. Last year, Amazon customers who live near a Kohl’s, Staples, Whole Foods, or Amazon Fresh started being charged a dollar if they returned items via a UPS Store.

Still, the overall practice of BORIS (buy online, return in-store) may be challenging for stores, even for packages bought on a retailer’s own website. A study last year led by researchers at the University of Portsmouth supported by the ECR Community Shrinkage and On-Shelf Availability Group concluded that with the additional staff and space requirements, “returns from online sales, particularly returns to store, are seriously impacting company profits.”

BrainTrust

"It’s great for Amazon and really great for Amazon customers. For Kohl’s, however, not so much…Kohl’s is missing an opportunity to convert these potential customers…"
Avatar of Gary Sankary

Gary Sankary

Retail Industry Strategy, Esri


"If the employees are unhappy with the staffing plan (or lack thereof), then rest assured, none of it will work, because the customers will be unhappy too."
Avatar of Brad Halverson

Brad Halverson

Principal, Clearbrand CX


"If the goal was getting people into the store, it is working. If the goal was to increase browse time and turn these potential customers into buyers, mission failed."
Avatar of Dave Wendland

Dave Wendland

Vice President, Strategic RelationsHamacher Resource Group


Discussion Questions

How confident are you that Amazon returns programs are offering more benefits than drawbacks for participating third-party retailers?

Do the gripes by store workers appear valid?

Do you see ways to improve the process of accepting returns in-store overall?

Poll

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Neil Saunders
Neil Saunders

There is a payoff for Amazon in terms of making returns more convenient which then pushes up customer satisfaction and loyalty. Ultimately, this means a retailer like Kohl’s is aiding a competitor. But Kohl’s made this Faustian agreement because they were desperate to drive foot traffic to their stores. To be fair, they have succeeded in that. The problem is that a small fraction of the traffic buys anything from Kohl’s. The numbers speak for themselves: over the past five years, Kohl’s has lost 1.3 million shoppers and has seen sales plunge by 13.5%. Amazon returns has not saved them so far. And Amazon returns will not save them in the future. 

Frank Margolis
Frank Margolis
Reply to  Neil Saunders

Hi Neil, I agree with your argument above, but I do believe that a straightforward merchandising strategy for Kohl’s would pay dividends here. If they view the Amazon return area as a high-traffic area (which it inherently is, despite usually being located at the back of the store), then they need to feature completely different products there – more impulse items, clearance items, etc – anything to create a “treasure hunt, must-look now” mentality.
My Kohl’s has housewares next to the Amazon returns, which is not a “let’s pop in and see what’s new” section… but if they had all their markdown items there, as Target does at the front of its stores, it would definitely warrant a quick look from most shoppers.

Neil Saunders
Neil Saunders
Reply to  Frank Margolis

Hi Frank. The thinking of placing the returns areas at the back of the store was originally to make people walk through the store and browse and buy on their way there and back. That hasn’t worked because merchandising is usually horrible and the assortment is weak. Creating a more compelling area around the returns location would certainly help. Interestingly, in some stores, returns are now being moved to the front of the store where Kohl’s is trying to do more with seasonal and impulse assortments. I am still not sure this is all that compelling, but it’s a kind of progress I guess…

Last edited 1 year ago by Neil Saunders
Craig Sundstrom
Craig Sundstrom

that at least 2 million new customers visited Kohl’s stores in 2020 due to its acceptance of Amazon

or is really 2 M potential customers, simply because they were in the store? That’s the crucial difference of course, and I haven’t a clue – hopefully CFO Timm does – since there’s no mention how the number was arrived at. The employees seem a bit whiny (about “we can’t do our jobs”) since their job is, ultimately, whatever they’re told to do, but I can empathize with a feeling of bait-and-switch if you’ve essentially ended up being Bezos’ errand boy (or girl).

Last edited 1 year ago by Craig Sundstrom
Neil Saunders
Neil Saunders

It is 2 million in foot traffic, if the figures are to be believed. However, the conversion rate is abysmal. Very few buy stuff from Kohl’s. Most come in, drop off the package and leave. Kohl’s terrible sales numbers tell us everything we need to know!

Craig Sundstrom
Craig Sundstrom
Reply to  Neil Saunders

Thanks Neal: I guess we know now why they’re eager to maintain an air of mystery about it…”feet” don’t actually buy anything!

Last edited 1 year ago by Craig Sundstrom
Brad Halverson
Brad Halverson
Reply to  Neil Saunders

Yes, 2 million but with no meaningful lift suggests deeper issues.

Gene Detroyer

Once the 2 million arrive at the store, isn’t it Kohl’s job to get them engaged?

Last edited 1 year ago by Gene Detroyer
Brian Delp

Unfortunately the offering to accept Amazon returns has become a necessary evil for some of these chains as they attempt to rebuild store traffic. Returns are a challenge for any retailer, by this only amplifies the issue. Forever21 has taken on a similar strategy by accepting returns for SHEIN purchases. These are short sighted tactics, which essentially bring a Trojan horse into stores.

Bob Amster

When I first heard that stores (Kohl’s) were going to engage in this program I was very skeptical. Accepting returns, yours or someone else is a process; a multi-step process. It is a function that requires dedicated staff, however small, because of the unpredictability of the timing and the additional volume due to accepting other returns besides one’s own. To think that a retailer can accept Amazon’s returns without creating a distinct function within the store was naïve from the start, and to think that it was going to significantly increase a retailer’s sales by default, was too optimistic. Let us note that the sales generated by the expected resulting additional foot traffic would have to pay for and exceed the cost of performing the function or else, there is not benefit. This was ill conceived and poorly executed. And, if dedicated labor is not assigned to it (think additional cost), then it is disruptive to associates who have been assigned another set of regular tasks, and it will – understandably – create disgruntled employees. Rewind!

Last edited 1 year ago by Bob Amster
Gene Detroyer
Reply to  Bob Amster

Bob, that was my first thought exactly: “To think that a retailer can accept Amazon’s return without creating a distinct function within the store was naïve from the start.

Brad Halverson
Brad Halverson

Amazon has an immediate and built-in advantage, because the customer is actively in a transaction with them, even if it’s only a return.

So it’s incumbent the host retailer not just assume they’ll pick off new customers, but have a realistic, well thought out plan. Receiving a jump in foot traffic from the worlds 2nd largest retailer means a good merchandising plan and communications must capture a targeted fraction of them with compelling offers, activation, and trial. Second, ensure ample staffing is on hand for the new trial customers to experience good service. And it goes without saying, if the employees are unhappy with the staffing plan (or lack thereof), then rest assured, none of it will work, because the customers will be unhappy too.

Last edited 1 year ago by Brad Halverson
Gene Detroyer
Reply to  Brad Halverson

Why would any retailer sign up without thinking this through to make it advantageous? Exactly. “So it’s incumbent on the host retailer not just assume they’ll pick off new customers but have a realistic, well-thought-out plan.”

Brad Halverson
Brad Halverson
Reply to  Gene Detroyer

I’m hoping the correct answer is Kohls did have a good plan but it didn’t work. Otherwise a big miss with an upside opportunity, but also a drag on store teams and staffing.

Shep Hyken

First, Amazon is all about convenience. More return locations mean more convenience. In addition, there is the foot-traffic opportunity for the retailer who finds ways to entice an Amazon customer to buy something from them. And if the store is already part of the customer’s shopping habits, then this is another reason for the customer to visit.

Gene Detroyer

I’ve used The UPS Store and Whole Foods regularly for returns. I see no issues there. FedEx Office handles others’ returns smoothly.

It seems that the other retailers have seen this as a free gimme and done nothing to take advantage of it. If it is worth additional business, it is worth adding the labor to handle the returns.

Last edited 1 year ago by Gene Detroyer
Brad Halverson
Brad Halverson
Reply to  Gene Detroyer

Three good examples with these. I’ve also had good interactions with returns at UPS. They ask if they can help me with anything else, no stress, friendly smiles. Returns at Whole Foods also works well, and I spend money on groceries immediately following.

Scott Benedict
Scott Benedict

I have to admit that I was skeptical of this program when it was first announced, particularly as it related to Kohl’s. However, I’ve watched their version of the program get refined and improved over time, and trust their leadership’s assessment that this program is a net positive as it draws traffic into their stores that would not otherwise be there.
The horror stories of other retailers mentioned in this story suggest that one of the benefits of taking Amazon returns is being achieved: additional traffic into the store. How well those customers are being cared for, and how prepared store associates are to serve their needs, would appear to be in need of some improvement.  Driving store visits is a critical, foundational element of physical retail. Complaining that you have too many customers to deal with seems like a bit of a head-scratcher to me. Fix your process, train your associates, and turn that traffic into a positive. Provide the customers with a coupon to shop with you, add them to your loyalty program, and provide them with a free sample. Do SOMETHING to take advantage of the traffic you are seeing. This can be a positive if you make it one.
In retailing, customers are not a disruption to your job…they are the reason you have one.
Customer

Gary Sankary
Gary Sankary

I didn’t really understand why Kohl would agree to do this, and it seems my concerns were valid. It’s great for Amazon and really great for Amazon customers. For Kohl’s, however, not so much. It has increased foot traffic in their stores, so much so that at my local Kohls, the Amazon counter is often the only line in the store. Sadly, Kohl’s is missing an opportunity to convert these potential customers wandering through their stores. Simply giving us a 20% coupon and doing the same old thing on the shelf and on the rack isn’t really working.

Gene Detroyer
Reply to  Gary Sankary

The fact that Kohl’s hasn’t taken advantage of this tells you all you must know about Kohl’s management.

Bob Amster
Reply to  Gary Sankary

My question to the. world is this: Was there really an “opportunity” to “miss” in the first place or was it smoke-and-mirrors by Amazon and a delusion by Kohl’s?

Nicola Kinsella
Nicola Kinsella

Amazon is definitely the winner here. The convenience of in-store returns is huge compared with shipping items back. But while Amazon returns may drive store traffic for retailers, what we’re not seeing is the conversion rates. What percentage of store traffic makes a purchase? Has that gone down? If so, by how much? What is the average sale value and has that changed? How much does it cost in labor to support the returns? Do these stats change depending on the in-store offers or merchandising activities undertaken by the retailer? Without looking at cost vs benefit you can’t determine if accepting Amazon returns is worth it.

Mark Self
Mark Self

On paper this looks pretty good–another way to entice customers into a store. Operationally I suspect there is a high price to pay to enable this, plus how many people just drop off their return then leave???
This benefits Amazon and it remains to be seen how much if any benefit there is for growth for the participating retailers.

Brandon Rael
Brandon Rael

Amazon’s trojan horse strategy of partnering with brick-and-mortar stores to accept their returns is a game changer for Prime customers, but it has become unmanageable for the retail partners, leading to significant operational challenges and rising operating costs.
Amazon‘s supply chain efficiencies, technology infrastructure, and fulfillment capabilities are unmatched, except for Walmart. However, The Washington Post reports that the Amazon drop-off service at these partnered retailers has transformed some store associates’ jobs into a “retail horror story.” Customers arrive with “hundreds” of packages to return daily, leading to long lines, abundant waste, and a stressful atmosphere.

  • When Amazon signed deals to turn brick-and-mortar retail stores into Amazon drop-off points, it was supposed to be a win-win: easier returns would mean happier customers while bringing more foot traffic into ailing retail locations
  • But store employees say the “Amazombies” have become a plague on their working lives. They waste staff time without increasing revenue while creating long lines, frayed tempers, and mounting piles of boxes and plastic waste
  • Some UPS Store and Kohl’s’ locations have had to allocate additional staff just to handle the workload
  • Last year, almost 5,000 Staples workers signed an online petition asking the company to either increase budgeted hours to add more employee coverage or stop accepting Amazon returns

The allure of “free returns” has played a big part in keeping customers engaged and buying more online. UPS Stores have long accepted Amazon returns, and Whole Foods began taking them shortly after Amazon acquired it in 2017. Kohl’s was next in 2018, with Staples following last year. These deals with the same retailers whose businesses were decimated by the rise of e-commerce made returns even more accessible: In 2023, Americans racked up $247 billion in online returns, according to the National Retail Federation.
Theoretically, the partnership with Amazon was aimed to benefit these third-party retail stores by increasing foot traffic, thereby boosting sales. However, this has yet to translate into revenue and margin growth despite the increased foot traffic at Kohl’s and other retailers. Despite already processing customer returns, retail associates also provide customer service for Amazon.

Dave Wendland

The execution of the Amazon returns process has not impressed me. If the goal was getting people into the store, it is working. If the goal was to increase browse time and turn these potential customers into buyers, mission failed.

Trevor Sumner

The discussion weighs a healthy strategic skepticism and (no surprise) staff complaints with the executive decisions to expand the programs, which seemingly indicate beneficial financial effects. I believe these could be extended as in my personal experience and research, retailers have not made the most of these return points in marketing to shoppers to increase conversion. A continued investment in conversion tests could lead to even better returns. Additionally, as retailers look to monetize in-store traffic, the extra traffic will help sell advertising programs, including with additional touchpoints at the lines in returns. Greater conversion and greater monetization on top of the existing economics, which executives continue to defend. The strategic elements of enabling your competitor’s return experience aside, this seems to be a continued and growing win.

Kenneth Leung
Kenneth Leung

Amazon got the better end of the bargain in terms of convenience for its customers. It is up to Kohl’s to figure out how best to convert the traffic based on location and demographics. Merchandising around the return area is going to be key for impulse purchase items, with clear directions to the categories that may interest returners while they are in the store. There is nothing you can do about the bulk returners jamming the return line, unless you have enough resources to have quick returns versus bulk returns.

Anil Patel
Anil Patel

The complaints from store workers about increased workload and no added revenue are valid. It’s clear that these returns clog up the system, frustrate staff, and don’t necessarily lead to more sales. To improve this process, retailers should demand better compensation from Amazon for handling returns or explore ways to streamline the process, such as designated return-only hours or dedicated staff for returns. Without such changes, these programs are more a burden than a benefit.

28 Comments
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Neil Saunders
Neil Saunders

There is a payoff for Amazon in terms of making returns more convenient which then pushes up customer satisfaction and loyalty. Ultimately, this means a retailer like Kohl’s is aiding a competitor. But Kohl’s made this Faustian agreement because they were desperate to drive foot traffic to their stores. To be fair, they have succeeded in that. The problem is that a small fraction of the traffic buys anything from Kohl’s. The numbers speak for themselves: over the past five years, Kohl’s has lost 1.3 million shoppers and has seen sales plunge by 13.5%. Amazon returns has not saved them so far. And Amazon returns will not save them in the future. 

Frank Margolis
Frank Margolis
Reply to  Neil Saunders

Hi Neil, I agree with your argument above, but I do believe that a straightforward merchandising strategy for Kohl’s would pay dividends here. If they view the Amazon return area as a high-traffic area (which it inherently is, despite usually being located at the back of the store), then they need to feature completely different products there – more impulse items, clearance items, etc – anything to create a “treasure hunt, must-look now” mentality.
My Kohl’s has housewares next to the Amazon returns, which is not a “let’s pop in and see what’s new” section… but if they had all their markdown items there, as Target does at the front of its stores, it would definitely warrant a quick look from most shoppers.

Neil Saunders
Neil Saunders
Reply to  Frank Margolis

Hi Frank. The thinking of placing the returns areas at the back of the store was originally to make people walk through the store and browse and buy on their way there and back. That hasn’t worked because merchandising is usually horrible and the assortment is weak. Creating a more compelling area around the returns location would certainly help. Interestingly, in some stores, returns are now being moved to the front of the store where Kohl’s is trying to do more with seasonal and impulse assortments. I am still not sure this is all that compelling, but it’s a kind of progress I guess…

Last edited 1 year ago by Neil Saunders
Craig Sundstrom
Craig Sundstrom

that at least 2 million new customers visited Kohl’s stores in 2020 due to its acceptance of Amazon

or is really 2 M potential customers, simply because they were in the store? That’s the crucial difference of course, and I haven’t a clue – hopefully CFO Timm does – since there’s no mention how the number was arrived at. The employees seem a bit whiny (about “we can’t do our jobs”) since their job is, ultimately, whatever they’re told to do, but I can empathize with a feeling of bait-and-switch if you’ve essentially ended up being Bezos’ errand boy (or girl).

Last edited 1 year ago by Craig Sundstrom
Neil Saunders
Neil Saunders

It is 2 million in foot traffic, if the figures are to be believed. However, the conversion rate is abysmal. Very few buy stuff from Kohl’s. Most come in, drop off the package and leave. Kohl’s terrible sales numbers tell us everything we need to know!

Craig Sundstrom
Craig Sundstrom
Reply to  Neil Saunders

Thanks Neal: I guess we know now why they’re eager to maintain an air of mystery about it…”feet” don’t actually buy anything!

Last edited 1 year ago by Craig Sundstrom
Brad Halverson
Brad Halverson
Reply to  Neil Saunders

Yes, 2 million but with no meaningful lift suggests deeper issues.

Gene Detroyer

Once the 2 million arrive at the store, isn’t it Kohl’s job to get them engaged?

Last edited 1 year ago by Gene Detroyer
Brian Delp

Unfortunately the offering to accept Amazon returns has become a necessary evil for some of these chains as they attempt to rebuild store traffic. Returns are a challenge for any retailer, by this only amplifies the issue. Forever21 has taken on a similar strategy by accepting returns for SHEIN purchases. These are short sighted tactics, which essentially bring a Trojan horse into stores.

Bob Amster

When I first heard that stores (Kohl’s) were going to engage in this program I was very skeptical. Accepting returns, yours or someone else is a process; a multi-step process. It is a function that requires dedicated staff, however small, because of the unpredictability of the timing and the additional volume due to accepting other returns besides one’s own. To think that a retailer can accept Amazon’s returns without creating a distinct function within the store was naïve from the start, and to think that it was going to significantly increase a retailer’s sales by default, was too optimistic. Let us note that the sales generated by the expected resulting additional foot traffic would have to pay for and exceed the cost of performing the function or else, there is not benefit. This was ill conceived and poorly executed. And, if dedicated labor is not assigned to it (think additional cost), then it is disruptive to associates who have been assigned another set of regular tasks, and it will – understandably – create disgruntled employees. Rewind!

Last edited 1 year ago by Bob Amster
Gene Detroyer
Reply to  Bob Amster

Bob, that was my first thought exactly: “To think that a retailer can accept Amazon’s return without creating a distinct function within the store was naïve from the start.

Brad Halverson
Brad Halverson

Amazon has an immediate and built-in advantage, because the customer is actively in a transaction with them, even if it’s only a return.

So it’s incumbent the host retailer not just assume they’ll pick off new customers, but have a realistic, well thought out plan. Receiving a jump in foot traffic from the worlds 2nd largest retailer means a good merchandising plan and communications must capture a targeted fraction of them with compelling offers, activation, and trial. Second, ensure ample staffing is on hand for the new trial customers to experience good service. And it goes without saying, if the employees are unhappy with the staffing plan (or lack thereof), then rest assured, none of it will work, because the customers will be unhappy too.

Last edited 1 year ago by Brad Halverson
Gene Detroyer
Reply to  Brad Halverson

Why would any retailer sign up without thinking this through to make it advantageous? Exactly. “So it’s incumbent on the host retailer not just assume they’ll pick off new customers but have a realistic, well-thought-out plan.”

Brad Halverson
Brad Halverson
Reply to  Gene Detroyer

I’m hoping the correct answer is Kohls did have a good plan but it didn’t work. Otherwise a big miss with an upside opportunity, but also a drag on store teams and staffing.

Shep Hyken

First, Amazon is all about convenience. More return locations mean more convenience. In addition, there is the foot-traffic opportunity for the retailer who finds ways to entice an Amazon customer to buy something from them. And if the store is already part of the customer’s shopping habits, then this is another reason for the customer to visit.

Gene Detroyer

I’ve used The UPS Store and Whole Foods regularly for returns. I see no issues there. FedEx Office handles others’ returns smoothly.

It seems that the other retailers have seen this as a free gimme and done nothing to take advantage of it. If it is worth additional business, it is worth adding the labor to handle the returns.

Last edited 1 year ago by Gene Detroyer
Brad Halverson
Brad Halverson
Reply to  Gene Detroyer

Three good examples with these. I’ve also had good interactions with returns at UPS. They ask if they can help me with anything else, no stress, friendly smiles. Returns at Whole Foods also works well, and I spend money on groceries immediately following.

Scott Benedict
Scott Benedict

I have to admit that I was skeptical of this program when it was first announced, particularly as it related to Kohl’s. However, I’ve watched their version of the program get refined and improved over time, and trust their leadership’s assessment that this program is a net positive as it draws traffic into their stores that would not otherwise be there.
The horror stories of other retailers mentioned in this story suggest that one of the benefits of taking Amazon returns is being achieved: additional traffic into the store. How well those customers are being cared for, and how prepared store associates are to serve their needs, would appear to be in need of some improvement.  Driving store visits is a critical, foundational element of physical retail. Complaining that you have too many customers to deal with seems like a bit of a head-scratcher to me. Fix your process, train your associates, and turn that traffic into a positive. Provide the customers with a coupon to shop with you, add them to your loyalty program, and provide them with a free sample. Do SOMETHING to take advantage of the traffic you are seeing. This can be a positive if you make it one.
In retailing, customers are not a disruption to your job…they are the reason you have one.
Customer

Gary Sankary
Gary Sankary

I didn’t really understand why Kohl would agree to do this, and it seems my concerns were valid. It’s great for Amazon and really great for Amazon customers. For Kohl’s, however, not so much. It has increased foot traffic in their stores, so much so that at my local Kohls, the Amazon counter is often the only line in the store. Sadly, Kohl’s is missing an opportunity to convert these potential customers wandering through their stores. Simply giving us a 20% coupon and doing the same old thing on the shelf and on the rack isn’t really working.

Gene Detroyer
Reply to  Gary Sankary

The fact that Kohl’s hasn’t taken advantage of this tells you all you must know about Kohl’s management.

Bob Amster
Reply to  Gary Sankary

My question to the. world is this: Was there really an “opportunity” to “miss” in the first place or was it smoke-and-mirrors by Amazon and a delusion by Kohl’s?

Nicola Kinsella
Nicola Kinsella

Amazon is definitely the winner here. The convenience of in-store returns is huge compared with shipping items back. But while Amazon returns may drive store traffic for retailers, what we’re not seeing is the conversion rates. What percentage of store traffic makes a purchase? Has that gone down? If so, by how much? What is the average sale value and has that changed? How much does it cost in labor to support the returns? Do these stats change depending on the in-store offers or merchandising activities undertaken by the retailer? Without looking at cost vs benefit you can’t determine if accepting Amazon returns is worth it.

Mark Self
Mark Self

On paper this looks pretty good–another way to entice customers into a store. Operationally I suspect there is a high price to pay to enable this, plus how many people just drop off their return then leave???
This benefits Amazon and it remains to be seen how much if any benefit there is for growth for the participating retailers.

Brandon Rael
Brandon Rael

Amazon’s trojan horse strategy of partnering with brick-and-mortar stores to accept their returns is a game changer for Prime customers, but it has become unmanageable for the retail partners, leading to significant operational challenges and rising operating costs.
Amazon‘s supply chain efficiencies, technology infrastructure, and fulfillment capabilities are unmatched, except for Walmart. However, The Washington Post reports that the Amazon drop-off service at these partnered retailers has transformed some store associates’ jobs into a “retail horror story.” Customers arrive with “hundreds” of packages to return daily, leading to long lines, abundant waste, and a stressful atmosphere.

  • When Amazon signed deals to turn brick-and-mortar retail stores into Amazon drop-off points, it was supposed to be a win-win: easier returns would mean happier customers while bringing more foot traffic into ailing retail locations
  • But store employees say the “Amazombies” have become a plague on their working lives. They waste staff time without increasing revenue while creating long lines, frayed tempers, and mounting piles of boxes and plastic waste
  • Some UPS Store and Kohl’s’ locations have had to allocate additional staff just to handle the workload
  • Last year, almost 5,000 Staples workers signed an online petition asking the company to either increase budgeted hours to add more employee coverage or stop accepting Amazon returns

The allure of “free returns” has played a big part in keeping customers engaged and buying more online. UPS Stores have long accepted Amazon returns, and Whole Foods began taking them shortly after Amazon acquired it in 2017. Kohl’s was next in 2018, with Staples following last year. These deals with the same retailers whose businesses were decimated by the rise of e-commerce made returns even more accessible: In 2023, Americans racked up $247 billion in online returns, according to the National Retail Federation.
Theoretically, the partnership with Amazon was aimed to benefit these third-party retail stores by increasing foot traffic, thereby boosting sales. However, this has yet to translate into revenue and margin growth despite the increased foot traffic at Kohl’s and other retailers. Despite already processing customer returns, retail associates also provide customer service for Amazon.

Dave Wendland

The execution of the Amazon returns process has not impressed me. If the goal was getting people into the store, it is working. If the goal was to increase browse time and turn these potential customers into buyers, mission failed.

Trevor Sumner

The discussion weighs a healthy strategic skepticism and (no surprise) staff complaints with the executive decisions to expand the programs, which seemingly indicate beneficial financial effects. I believe these could be extended as in my personal experience and research, retailers have not made the most of these return points in marketing to shoppers to increase conversion. A continued investment in conversion tests could lead to even better returns. Additionally, as retailers look to monetize in-store traffic, the extra traffic will help sell advertising programs, including with additional touchpoints at the lines in returns. Greater conversion and greater monetization on top of the existing economics, which executives continue to defend. The strategic elements of enabling your competitor’s return experience aside, this seems to be a continued and growing win.

Kenneth Leung
Kenneth Leung

Amazon got the better end of the bargain in terms of convenience for its customers. It is up to Kohl’s to figure out how best to convert the traffic based on location and demographics. Merchandising around the return area is going to be key for impulse purchase items, with clear directions to the categories that may interest returners while they are in the store. There is nothing you can do about the bulk returners jamming the return line, unless you have enough resources to have quick returns versus bulk returns.

Anil Patel
Anil Patel

The complaints from store workers about increased workload and no added revenue are valid. It’s clear that these returns clog up the system, frustrate staff, and don’t necessarily lead to more sales. To improve this process, retailers should demand better compensation from Amazon for handling returns or explore ways to streamline the process, such as designated return-only hours or dedicated staff for returns. Without such changes, these programs are more a burden than a benefit.

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