Go figure! Amazon proving to be solid partner to retailers
The common (and increasingly simplistic) Amazon storyline goes like this: Amazon is killing physical retail as shopping goes digital. The reality is way more nuanced. Amazon is increasingly a partner to the brick-and-mortar crowd and is often involved in win-win deals.
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What? That's impossible.
Believe it. Here are a few recent mentions from retailers on their earnings conference calls. These comments have been made following strong same-store sales and results generally better than expected. Simply put, retail isn't dead. It's on fire, and Amazon, in some cases, is even boosting foot traffic.
Consider:
Best Buy
Best Buy CEO Hubert Joly called out a product development partnership with Amazon and how he was optimistic about it. Best Buy's second quarter results were strong and smart home is one big reason. Joly said:
The third highlight of the quarter is the launch of the first TV Smart TV that's part of our product development partnership with Amazon. This partnership is a good example of how we are leveraging our expertise and unique merchandising, marketing and sales assets to help leading technology companies commercialize their new products. As a reminder, the TVs are available only in Best Buy stores on bestbuy.com and on amazon.com through Best Buy as a third-party seller. We're planning to launch additional models in September and October.
Remember how Best Buy was going to be run over by Amazon?
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Khol's
Kohl's CEO Michelle Gass said that an Amazon partnership to handle returns drove foot traffic in its most recent quarter.Kohl's delivered strong earnings, too, and it has plans to expand its pilot with Amazon.
This is a big deal for us and for Amazon. We are studying it very closely. As you know, as we've taken on things of this magnitude in the past, whether it was our first loyalty test or beauty expansion, we want to make sure we optimize and we get it right. And of course, it's us and it's Amazon to make any further decisions. We're very pleased with the customer response. It is a frictionless experience. We're pleased, and certainly, Amazon is very pleased about that. But all elements have to work. The operations have to work, the financials have to work. So we are doing our best to really understand and dig deep before any decision is made going forward. But we're excited to have expanded the pilot now to 100 stores. It gives us a really robust data set to make a great decision down the road.
Amazon
Amazon expanded a program with Sears Auto Center to sell tires and have them installed at Sears. Amazon will ship tires to the Sears Auto location with a preferred date for installation. Sears is also selling Kenmore brands on Amazon.
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Now, Sears is a zombie retailer, but the company is using Amazon for distribution, in hopes off offsetting falling foot traffic. Sears said that its partnership with Amazon has "significantly expanded the reach" of brand such as Kenmore and DieHard.
Rest assured, Walmart won't partner with Amazon on any level, but the rest of the retail landscape may want to consider at least some coopetition arrangement.
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The journalism idea that three things makes a trend is a tired crutch, but in this case, the Amazon-retailer partnerships certainly add more nuance to the idea that the e-commerce giant kills everything in its path. Sure, retailers are going under, but many of them were saddled with huge debt loads in buyouts (see Toys R Us). Amazon's role in the retail landscape is far more nuanced than you'd think.
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