Brick-Mortar Retail and Amazon in the Age of Covid


A large proportion of brick-and-mortar retailers have been destroyed in recent years. came first Amazon. later Pandemic.

Still a giant shopping malls dying and many storefronts shuttering, the big box stores that anchor suburban shopping malls are enjoying a renaissance. Companies like Best Buy, Dick’s Sporting Goods, and Home Depot have managed to survive and even thrive. Add another unlikely contributor to this list: Kohl’s.

The retailer, which sells clothes, home goods, sporting goods and more, stands up to any challenge. It’s not always clear where exactly Kohl fits in. It is smaller than a store but has many of the same offerings. Their stores are usually close to Walmarts but have more common brands.

Since taking over as CEO of Kohl in 2018, Michelle Gass has been working to create a different identity for the company. He joined the company eight years ago after working at Starbucks for over a decade.

His moves include – in addition to keeping stores open during the pandemic – forging a number of partnerships with other companies.

The most unusual is a deal with Amazon Allows customers to return Amazon products to Kohl’s stores in 2019. While there, Miss Gass hopes they can do some shopping.

Another new partner is beauty retailer Sephora, which has set up mini-stores at Kohl’s locations. It’s a bit like a mall.

This interview has been summarized and edited for clarity.


But what about your childhood informing your job as CEO today?

I was born and raised in a small town in Maine and grew up in a very working-class family and community. I was one of the first in my family to earn a four-year college degree. This really encouraged the urge to do more, to achieve more, from a very young age. I worked throughout my high school and college life. My first job was grocery shopping. I’ve been a waitress and even a factory job. I like to work hard and I really value people who work hard.

I got my degree in chemical engineering. Sometimes people ask me, “How did you learn engineering specifically as a woman?” he asks. And frankly, I was pretty pragmatic and knew I could get a great job with it. I didn’t grow up with any engineers around, but I did my homework and I felt this would open doors. And it really happened.

What did you learn from working with Howard Schultz at Starbucks?

three things. One is the importance of culture; such a strong culture was built over time. Second, it’s not just what you sell, it’s the importance of this human connection, the emotional connection around life or the consumer, proximity to the brand. And third, and my biggest passion, is the power of innovation.

Starbucks has a very clear brand recommendation. How would you describe where Kohl sits in the consumer ecosystem?

Kohl’s has long had a successful model, like this hybrid department store brand, but with the convenience of a mass mall. But over time this blurred. So the challenge and the opportunity is: “Okay, what’s the space we can occupy to differentiate?” Part of it was becoming a relevant omnichannel retailer. And I really feel like we ticked that box. But how do we become more relevant in terms of product and brand? What kind of thing are we going to have a brand stand for?

Stores have struggled over the past few years. So how do you get this to work when the JC Penneys and Macys are in such a mess?

We are far from what a traditional store is. We’re small, we’re very comfortable, and that allows us to do things like buy online, pick up in-store, and pick up from the curbside. But more importantly, we see ourselves as an exclusive concept, Kohl’s curator and editor who will bring you all the products and brands you need to lead a more active and relaxed lifestyle.

Has the market risen? Has the market fallen? Who are the target consumers?

We have America. We serve a very broad customer base, truly all demographics. Our strategy is to sell products for an active and everyday lifestyle and the kind that strengthens during the pandemic. People want to look good. They want to be comfortable. Working wardrobes, when you finally come out of this, will look very different from the way they came in.

Many people would think that a real retailer would be crazy to work with Amazon. What is the rationale for your agreement with them?

When you take a step back and consider what it’s like to return goods, the traditional way can be very inconvenient, especially with online returns. I’m looking for the box, looking for the tape, sticking the plug, all. We address this pain point. Amazon gets a deal that can address the friction point and we can use our appetite and welcome in traffic. It was certainly unconventional when we announced it, but I think it worked out really well.

How has the pandemic changed the retail business to continue in the months and years to come?

In a crisis, you have to make very quick decisions. We clearly needed to prioritize how we keep our employees and customers safe. Once that settled, we took the opportunity to look at our strategy and ask, “How can we be bigger and bolder?” we asked. This got us to start chatting with Sephora.

Speaking of profitability gains, how much of that reflects on business partners and people in stores?

We had to make such tough decisions in terms of permission and when we opened the doors and invited our partners back, and it’s a very tight labor market. We do a lot to ensure that we are competitive on a market basis. That’s why we provide bonuses to our hourly partners. So I feel like we do a lot to make sure we create a very good environment for our people.

What do you need to do to attract the employees you need right now? What do they want and, frankly, what do they get when they are not?

More than 75 percent of this workforce is part-time, and our partners love flexibility. They love culture.

Do people really prefer to be part time? Are you really saying that if you offered them a full-time role, they would turn it down?

I think this question is difficult to answer. What I hear most from people is that they love this concept of flexibility. And I strongly believe that we provide many opportunities.

You talked about being a servant leader earlier. How do you balance the obligation to look after your employees with your commitment to present to shareholders?

As the driving CEO, I have many stakeholders and certainly our investors are one of them. One of my responsibilities is to ensure that we have a sustainable business, a business that can employ large numbers of people and at the same time serve stakeholders and society at large. Regarding the people we employ, people work at Kohl’s for many reasons beyond their paychecks. This is an important part. Definitely. But you’re proud to have a great job and to be part of a company you’ll be proud to be associated with.



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