How Netflix Is Becoming a Retailer

This is what agility looks like: Netflix launched Squid Game globally on September 17. By October 4, Netflix was selling official Squid Game merchandise on Netflix.shop, Netflix’s e-commerce site. By October 11, Netflix and Walmart had launched a Netflix Hub on Walmart.com, where shoppers could find merch based on Netflix shows, including Squid Game. Netflix has always had a knack for creating culturally relevant shows that connect with people through their beliefs and behaviors. Now Netflix is reading the pulse of culture and cashing in through retail.

Netflix.shop Launches a New Revenue Stream

Netflix launched Netflix.shop on June 10 to sell merchandise based on Netflix shows (as Disney has done so well with entertainment since the dawn of time). With the help of Shopify, Netflix uses artificial intelligence to quickly spot trends in consumer tastes and sell culturally relevant merchandise — which is exactly what is happening with Squid Game, the most popular debut show ever on Netflix.

Netflix.shop is an important foray into e-commerce for Netflix. The existence of the store represents a shift in thinking for the company that has define New Hollywood success. Netflix’s stock continues to eclipse previous all-time highs, but the company is spending $13.6 billion on content in 2021. Rising costs, coupled with a decline in subscriber growth, has led to ongoing speculation that the company will adopt advertising in some form. But so far Netflix has resisted an ad-supported tier as its competitors have done.

Selling licensed products is a revenue opportunity too big for a content creator to ignore. Sales of licensed products tied to shows, films and characters were about $49 billion in the United States in 2019, and $128 billion globally, according tothe most recent study of the industry by Licensing International, a trade group.

In fact, Netflix actually been in the merchandising business for a few years now. In 2019, Netflix and bike maker Mongoose agreed to offer a limited edition Mongoose based on a fictional bicycle used in Stranger Things, which was followed by the licensing of more Stranger Things-inspired bikes. Netflix also launched 75 co-brands, including those with Burger KingCoca-ColaH&M, and Nike.

These relationships — hybrid in-show product placements plus real-world merchandising — offered a glimpse of how Netflix would monetize its titles more broadly. Notably, the tie-in capitalized on the growing popularity of Stranger Things, which was a turning point for Netflix’s commitment to merchandising.

But even then, Netflix viewed merchandising and co-brands as a way to gain exposure Netflix shows as opposed to being a serious revenue stream. CEO Reed Hastings said that Netflix did not want to “get distracted with alternative revenue sources,” because its subscriber engine is what drives revenue, Hastings said in the earnings interview.

“The core focus is, create all these merchandising opportunities, tie-ins, touch points, so that you feel the ‘Stranger Things’ energy so that more people join,” Hastings said. “We do monetize all that. It’s just we’re monetizing it through our giant engine rather than through little sidecar vehicles.

A Change in Strategy

That’s not the case now. In 2020, Netflix hired Nike and Disney veteran Josh Simon to lead its Consumer Products division. Since he came aboard, Simon has tripled the size of the Consumer Products team. In addition to the partnering with Walmart, he’s been behind Netflix arranging distribution deals with Targetand Amazon to sell Netflix-inspired clothes, toys, beauty supplies and housewares.

Simon told The New York Times that Netflix.shop operates as a boutique, with Netflix instead focusing its efforts on more deals with store chains and fashion brands. “Practically speaking, the revenue will come more from those partners around the world in terms of sheer footprint and number of locations and magnitude,” he said.

And this is where Walmart comes into play. The online hub is Netflix’s first such site on another retailer’s site. A dedicated hub makes it easier for shoppers to find Netflix merchandise and also raises Netflix’s profile with customers of the world’s largest retailer. In addition, Walmart said that an initiative known as Netflix Fan Select will make it possible for fans to vote for the merchandise they would like to see from favored Netflix shows. Steven Mallas of Seeking Alpha says the relationship gives Netflix two pricing tiers:

First, the Netflix shop destination at its own site could focus on higher-priced items, including limited editions and other collectibles. Higher price points allow the company to more efficiently sell its items: i.e., take more money per unit and carry less units, which reduces risk compared to a mass-merchandise production plan.

The other side of the coin, the Walmart deal, will presumably focus on the latter merchandise model. These will be items that are priced to sell for a wider swath of the Netflix fandom.

Indeed, for Squid Game, Netflix and Shopify have unveiled merchandise ranging from $50 hoodies to $35 custom tees.

The products capture some of the iconic moments and characters in the violent show about people playing for their lives in a deadly series of games. The Netflix Hub on Walmart sells similar Squid Game merchandise, including tees and caps, but at a lower price.

Mallas also says that Netflix Fan Select opens up some intriguing possibilities:

Crowd-funding is something I always believed Amazon (AMZN) would have pursued to an effective degree/scale by now, but Netflix/Walmart easily could exploit this form of funding. It would reduce risk of production by collecting capital upfront from the very consumers who want to buy the product. And if both companies are serious about taking this website beyond online shopping carts and search engines, perhaps special exclusive filmed entertainment content could be crowd-funded and sold.

Imagine a short film based on the Stranger Things universe brought into existence by the fans, and then sold as a digital download, or even as an NFT… it just depends on how far the two partners want to go. It would be an easy way to create brand extensions at attractive economics; consider a toy company such as Hasbro (HAS), which has a history of seeking financing from fans for crowd-funded projects. Why simply vote for a product when you can also pay for it too? There does exist a consumer willingness to help corporations out in this regard, so long as there is sufficient demand for a certain concept.

Meanwhile Netflix has now engineered a way to stoke the fires of cultural relevance with its content and brand. If Netflix sees a show trending on social media, it can move nimbly — an approach Nike is taking by building its Nothing But Gold site. The need for speed influenced Netflix’s decision to work with Shopify to run Netflix.shop. Shopify President Harley Finkelstein told The New York Times that Shopify understand how to handle big merchandise drops ranging Taylor Swift albums to sneaker releases, “We’ve been battle-hardened around some of the largest flash sales on the planet,” he said.

Well Positioned to Grow

That Netflix could launch Squid Game merchandise so quickly is remarkable. Squid Game seemingly emerged from out of nowhere to take the world by storm, with its popularity based on word-of-mouth marketing.

Netflix is well positioned to grow its e-commerce business. But the company also as challenge: it’s one thing to cash in on a show such as Squid Game that builds enormous buzz early on. But other shows can take time to build the kind of fan loyalty that translates to a steady stream of merchandise sales. And lately Netflix has been quick to cancel shows in their infancy. In 2020 alone, Netflix canceled 18 original series, prompting Ken Renfro of Insider.com to note that “Netflix has a TV-show problem.” The company may need to be more patient to allow shows to become merchandise-friendly brands.

How Thanksgiving Provides Retail Therapy

How did you spend your Thanksgiving? Did you check in with your aunt on Zoom or perhaps take a walk around the neighborhood with your immediate family? Although some defied the CDC advisory about family gatherings and traveled to be with loved ones, it looks like many of us stayed home and . . . shopped online. According to Adobe Analytics, Thanksgiving Day spending online rose by nearly 22 percent year over year to $5.1 billion, hitting a new record. Black Friday was also a big day for online shopping, but what is Black Friday now, anyway, as retailers hold Black Friday sales online going back to October?

Welcome to the coronavirus holiday shopping season.

Thanksgiving: The New Black Friday

I remember when the big box retailers such as Walmart began moving their Black Friday sales to Thanksgiving evening years ago. In addition to watching football players maul each other on TV, now we’d be able to watch YouTube videos of shoppers mauling each other.

I reacted with mixed feelings. Did we really need to turn a time for family gatherings into a national day of shopping? But I also knew from my own first-hand research that Black Friday can be a social experience for families, and perhaps families would extend that particular form of bonding to Thanksgiving while they were already together.

Thanksgiving Grows Online

Well, shopping on Thanksgiving turned out to be a popular pastime, but the real story was its online growth year over year. It turned out browsing websites for deals complemented our TV viewing and turkey eating perfectly while we relaxed at home. And 2020 was no different — and yet it was very different. The big retailers were closed on Thanksgiving. And most of us were practicing social distancing. So, alone in our homes, we did what came natural: we shopped as we did in years past.

And why not? We’re living in unbelievably stressful times. The pandemic is exacting a heavy toll on our mental health. In April, nearly half of U.S. adults surveyed by the Kaiser Family Foundation reported that their mental health had been hurt due to worry and stress over the virus, and the mounting stress continues to ratchet up anxiety levels. As The Lancet reported, “COVID-19 has resulted in an increase in known risk factors for mental health problems. Together with unpredictability and uncertainty, lockdown and physical distancing might lead to social isolation, loss of income, loneliness, inactivity, limited access to basic services, increased access to food, alcohol, and online gambling, and decreased family and social support, especially in older and vulnerable people.”

Retail Therapy

Shopping is like therapy during stressful times. “Retail therapy” is real. Shopping helps us reduce stress by keeping our minds off our problems. As reported in HelloHeart.com:

[A]ccording to a study done by University of Michigan researchers, shopping to relieve stress (otherwise known as retail therapy) was up to 40 times more effective at giving people “a sense of control” and that shoppers were three times less sad compared to those that only browsed for items.

And way back in 2013, Kit Yarrow, a consumer research psychologist, noted the distinct benefits of online shopping. She wrote, “In my most recent consumer interviews, online shopping is increasingly mentioned as a type of mini-mental vacation. It makes sense.”

No wonder online commerce has boomed in 2020 — so much so that the pandemic accelerated the shift to eCommerce by five years, according to IBM. Of course it did. Scared and stressed, we’re seeking retail therapy. But with many stores closed during lockdown, we’ve often had nowhere else to turn but online — and even when stores have been open, we’ve often felt anxious about visiting them.

Our economy needs us to shop. And we need to shop, too — for noble reasons such as supporting businesses and uplifting others with gifts — and also for therapeutic ones. Bring it on. We need the therapy.

Photo by rupixen.com on Unsplash

Target and Walmart Succeed by Delivering on Retail’s New Brand Promise of Health and Safety

Target and Walmart are selling safety. And they’re succeeding.

Both retailers surprised analysts by reporting strong quarterly earnings in August, sending their stock prices to all-time highs. It turns out that as the COVID-19 pandemic rages on, people are choosing to visit Target and Walmart even at a time when going to the store means putting our lives on the line.

Why?

Because the brand promise of retailers has changed from “Save money and enjoy our store” to “Shop with us, and we’ll protect you from yourselves.” And both Target and Walmart have delivered on this promise big time.

Target and Walmart Make It Easy to Shop without Stepping into the Store

They offer services such as curbside pickup that limit a shopper’s exposure to the risks of being inside a store. Walmart began rolling out curbside in 2016 (the service was called Pickup and Fuel then). Target responded a few years later. Both companies are benefitting from the surging interest in curbside. Target said that sales through Target’s curbside pickup service grew by more than 700% in the second quarter from a year earlier. Walmart said U.S. eCommerce sales grew 97 percent, as more customers shipped packages to their homes and used same-day delivery and curbside pickup.

Target and Walmart Have Changed the Rules of Shopping

Early on, both Target and Walmart aggressively enacted health and safety protocols such as using floor stickers to help shoppers keep their social distance, installing plastic guards to protect employees and shoppers from each other in the check-out lane, and mandating that shoppers wear masks to enter their stores. These protocols have not worked perfectly.

Unfortunately, some selfish shoppers have chosen to recklessly endanger everyone else by not wearing a mask. And yet, Target and Walmart are convincing people to visit their stores. Target reported that in-store comparable sales climbed by 10.9 percent during its second quarter. Walmart’s U.S. same-store sales were up 9.3 percent.

The Golden Arches of Retail

Retailers such as Target Walmart have, in effect, become the new Golden Arches. Decades ago, McDonald’s famously made the Golden Arches a symbol of consistency and predictability for restaurants. Especially as Americans began to travel more in their cars in the 20th Century, seeing those Golden Arches by roads provided some measure of assurance that you knew exactly what you were getting when you stopped for a meal. Today seeing that Target logo by a highway provides some degree of predictability and comfort in the hostile land of the maskless.

This truth resonates as shaken families across the United States have tried to reclaim some semblance of normalcy by embracing the time-honored tradition of the American road trip. According to Airbnb co-founder and CEO Brian Chesky, Americans are getting in their cars again and taking 200-mile road trips to smaller communities and outdoor parks. That’s because congested cities are more dangerous than state parks and hotels in the country. Air travel is more dangerous than a leisurely drive in your car. But even so, when you hop in your car and hit the road, you take on new risks, and if you travel with a family, you put them at risk, too. Depending on your destination and where you live, your drive may take you through multiple cities and states, each with their own customs for managing coronavirus health and safety. You’re literally leaving your comfort zone when you go on a road trip. Even familiar places now seem like unexplored territory.

Short road trips will continue to define the American vacation experience especially with national holidays that make it possible for people to travel for long weekends all year-round. If you took a road trip this summer, you know the drill by now: you probably planned for your trip carefully in ways you did not need to only months ago. Perhaps you investigated a motel or an Airbnb’s COVID-19 hygiene practices and protocols ahead of time. You might have packed a cleaning kit to wipe down your room when you arrived. Maybe you packed snacks to minimize having to stop at restaurants, especially if your drive took you to places where you were not sure how well people followed mask-wearing or social distancing protocols. But at some point you, needed to stop somewhere. You were low on gasoline. Your kids needed to go to the bathroom. You forgot to pack enough socks and need to buy an extra pair.

But as we know by now, a routine stop elevates your stress level. You stop at a gas station or a store by a highway exit, and you go into self-preservation mode, assessing the danger levels by using your own internal survival rules, just like Jesse Eisenberg did when he was trying to avoid encounters with zombies in Zombieland. How small or big does the location look? (Tiny aisles in roadside gas station convenient marts seem deadly.) How crowded is the place? Do they post a sign with ground rules for maintaining social distance? And are customers wearing masks?

Fortunately, at gas stations, you refill the tank outside and can manage your social distancing. But when it comes to getting a cup of Starbucks, a bottle of water, or those extra socks, it’s time to pull out your mobile phone and search for the nearest Target or Walmart. That’s because you know they have a national policy of requiring people to wear masks when they enter the store, and they offer services such as curbside. You’ve probably been to a Target or Walmart near your home and seen firsthand the policy in place. You’ve noticed the employees wearing masks and red shirts wiping down the self-checkout lanes at Target or processing your purchase from behind the relative safety of a plastic shield. Those details mean everything.

Maybe you’d like to support local businesses, and the closest big-box retailer is a bit farther than you’d like to drive. But people are getting sick and dying, and idiots who refuse to wear masks are making things worse. At least Target and Walmart, no matter where you go, require masks. It’s not a fool-proof approach — belligerent people who refuse to wear masks still slip through. But it’s something. And those wide aisles sure make it easier to avoid getting too close to some careless shopper who isn’t paying attention to where they are pushing their shopping cart. That predictability of service and safety could save your life.

My Own Road Trip Experience with Retail

I have learned these new rules of the road firsthand. My wife Jan and I have taken three road trips since the pandemic hit, two out of necessity and one for leisure. The first road trip, several hundred miles to Massachusetts in early June to see my seriously ill father, was stressful at first. When we stopped at a rest area for a bathroom break, I was anxious. But seeing chairs in public spaces put away and signs announcing social distancing procedures made me feel just a bit more comfortable. At least someone in the rest stop was taking some measures. Just about everyone wore masks, too, but not all travelers did. So we kept our stops to a minimum. As we drove east and entered New York state, the drive became more relaxing. That’s because New York state residents were uniformly compliant with their mask wearing and social distancing, whether we were visiting a rest stop or staying in a motel. The entire state felt like an advertisement for how to respect each other during the pandemic.

The drive to Massachusetts was important. Not only did we see my dad, under hospice care at home, but we also overcame our fear of traveling during the pandemic. We eventually worked up the courage to take a 280-mile drive to La Crosse, Wisconsin, for a long weekend of hiking and biking. Like everyone I know, we had hit a point where we just needed to get away — to drive somewhere and escape. We knew this trip might be like visiting the wild west. The state of Wisconsin has been more aggressive than many other states about opening its economy, and we’d heard of local Wisconsin businesses being lenient with their protocols. Halfway into our drive, we stopped to rest in Madison, Wisconsin. It was an uneventful stop. We found a shopping mall we knew about. Masks were mandatory to enter, and compliance was nearly uniform. Like the survivors in The Walking Dead, we kept our eyes peeled for mask-less mall wanderers and easily avoided being near them. When we arrived at La Crosse, we immediately visited a somewhat remote trail for a glorious late afternoon hike up a steep trail with challenging switchbacks — just the kind of experience we’d been hoping for and, frankly, one I needed to work off my COVID-19 flab. Fortunately we encountered few people on the trail, and when we did, we held our breath and kept our masks on.

After the hike, we both wanted cold water and Gatorade. So we stopped at a local gas station with a shopping mart inside. Right away, we went into self-preservation mode. And the place failed, miserably. Lots of people without masks came and went through the narrow doorway. And apparently no attempt was made to monitor the number of people in the cramped store. After sizing up the place, we aborted the mission. Unfortunately, the gas station was not the only place in La Crosse where apparently no one cared about masks. But, undeterred, we decided it was time to adopt the Target Strategy. We found a large, welcoming Target nearby, which looked like a beacon of safety in the distance. Sure enough, just like the Target near our house, the one in La Crosse mandated that all customers wear masks — which they did. And just as we’d experienced at our own Target near our home, the mask-wearing employees had the spray bottles out to keep the place clean. At the check-out lane, a good-natured employee asked us how our day was going as she wiped down the counter and rang up our purchases. We mentioned how much we appreciated the visible safety protocols. Seeing employees so diligent about keeping the place clean was comforting. She admitted that other employees sometimes grumbled about how tiresome the constant cleaning was, but she was a new employee and therefore did not have any other frame of reference. Always wearing a mask and keeping a spray bottle and paper towel at her side seemed a natural part of the experience.

The New Retail Customer Experience

A great customer experience now comes down to how quickly and safely you can get out of the store, and how well a store can assure you with visual cues that they really do take your personal health and safety as seriously as they say on their website and in their official emails. During the pandemic, Target and Walmart have sensed and responded, and there’s no turning back. 

How Coca-Cola Makes Life More Bearable During the COVID-19 Pandemic

Coca-Cola recently announced a technology, contactless pouring, that makes it possible for people to choose and pour a drink from a Coke Freestyle fountain machine without needing to touch the display screen. With contactless pouring, consumers choose flavors and pour drinks by using their mobile devices to scan a QR code on the dispenser display. The news generated a few eye-roll responses on social media, including one doubting Thomas who wondered what all the fuss was about:

But I don’t think it matters how innovative or critical the technology is. A contact-free Coke machine is all about making us just a bit more comfortable with life during the COVID-19 pandemic. As I told Adweek, “We’re living in unbelievably stressful times, and if Coca-Cola launches a mobile interactive technology that reduces our stress even a little bit, then more power to Coca-Cola.”

The Freestyle dispensers are usually found in restaurants or workplaces. After their widespread rollout in 2019, they made it more fun for people to select fountain drinks by using a touchscreen to choose from 100+ different Coke products. Part of the joy was exploring all the different flavors in a machine and creating your own custom-flavored beverage (I have always loved combining Fanta Zero Fruit Punch and Peach with Sprite Zero Cherry). But exploring all those flavors also means standing in front of a Freestyle machine and touching a screen, usually multiple times – which has no appeal while the pandemic continues indefinitely. So with people slowly returning to restaurants in fits and starts, Coke created a workaround: just point your phone at the machine and make your favorite mixes without needing to touch a germy screen (and presumably you can have more control over where you stand):

A contact-free Freestyle machine is not going to save the world; touching a surface is not even the primary way the virus is spread, according to the Centers for Disease Control and Prevention. But the customer experience may give us some peace of mind and a sense of normalcy sorely lacking at a time when people’s routines have been altered radically. Life might be upended, but you can still have some of the little routines that are part of your day, such as pouring a drink from a dispenser. As such, contactless pouring addresses one of the troubling impacts of our times: the strain on our mental health caused by COVID-19. 

Consider all the threats to our mental well-being that the pandemic has triggered: the stress of waking up each day knowing that a deadly virus with no vaccine continues to rage; weeks at a stretch lived in lockdown this past spring with the possibility of lockdown returning; parents of children forced to become home schoolers while they hold down their jobs; and millions of people losing their jobs during a recessionary economy. Any of those factors alone would create widespread tension, fear, and anxiety. And we’re enduring all of them and more.  

The stress is taking its toll. In April, nearly half of U.S. adults surveyed by the Kaiser Family Foundation reported that their mental health had been hurt due to worry and stress over the virus. At the time 72 percent of U.S. adults surveyed by Newsweek said that they would hit a mental “breaking point” by early June if coronavirus stay-at-home orders extended through the start of summer – and we were only weeks into lockdown then. The Lancet summed up where we are now in the dry but still potent language of academia:

COVID-19 has resulted in an increase in known risk factors for mental health problems. Together with unpredictability and uncertainty, lockdown and physical distancing might lead to social isolation, loss of income, loneliness, inactivity, limited access to basic services, increased access to food, alcohol, and online gambling, and decreased family and social support, especially in older and vulnerable people.

And people expect businesses to relieve the strain. More than three quarters of the general population surveyed by Kantar said they would like to see brands talk about how they’re helping people adapt to the new reality of life during COVID-19. Seventy-seven percent would like brands to inform consumers about their efforts to combat COVID-19.

Businesses have responded quickly, sometimes in profound ways, as with Apple and Google collaborating on contact-tracing technology. In the retail and restaurant industries, businesses have focused on making the shopping and dining experiences safer and more comfortable, installing plexiglass shields at check-out lanes, adopting curbside pick-up services, and requiring that shoppers wear masks inside stores. These actions are meaningful on two levels:

  • They could help save lives, especially those regulations requiring that people wear masks.
  • They make us feel more comfortable by giving us a sense of control – thus easing the burden of the life we’re living now,

The contact-less Freestyle machine brings to mind something that Netflix CEO Reed Hastings said about the growth of Netflix’s subscribership during lockdown: “Our small contribution in these difficult times is to make home confinement a little more bearable.”

We still have difficult times ahead. Businesses cannot stop the coronavirus. But they can make our lives a little more bearable. And in their humble way, Coke Freestyle machines are doing just that.

Why Amazon and Kohl’s Need Each Other

Amazon and Kohl’s are expanding a relationship that appears to be working for the two frenemies. As announced recently, all 1,150 Kohl’s stores across the United States will accept Amazon returns, thus expanding a program the two companies began to pilot in 2017. Kohl’s will accept eligible Amazon items (without a box or label) and return them for customers for free. As a result, Kohl’s becomes a product return center for Amazon. 

How Amazon Returns Work at Kohl’s

In early 2018, I visited a Kohl’s location in Woodridge, Illinois, shortly after the store began accepting Amazon returns. A giant banner at the front of the store made it clear that Amazon returns were welcomed. The designated Amazon returns station was set up near the entrance. I asked a sales associate why the Amazon returns center was at the front of the store. Wouldn’t it be better to place the center in the back, which would generate more foot traffic throughout the store? She replied that Kohl’s already operated its own returns counter at the back of the store, and having an Amazon returns counter at the same area was confusing to customers. But to encourage foot traffic, Kohl’s gave Amazon customers coupons with discounts for in-store purchases.

In April 2019, I visited the same store. I noticed that the Amazon returns desk had been moved to the back to an all-purpose service counter for customers of Amazon and Kohl’s (for both online pickup and returns). Signs throughout the store directed Amazon customers to the consolidated returns center.

Each person at the service counter accepted all returns, whether from Kohl’s or Amazon. It was clear that the associates had been trained to fulfill both types of returns based on how quickly they managed the process. An associate also confirmed that Kohl’s continues to provide coupons (with a one-week expiration date) to encourage Amazon customers to stay in the store and shop for Kohl’s merchandise. Someone at Kohl’s must have gotten the message: when you see an opportunity to get customers walking through your store, you take it. With the passage of time and the assistance of clear signage, customers will figure out where to take their returns.

In addition, near the entrance, an Amazon-branded pop-up store offered a wide range of Amazon products, including different Echo speakers and Fire products. Here was an attempt to make Kohl’s a distributor for Amazon as well via a pop-up store. But apparently the attempt failed to take root. Amazon recently announced the discontinuation of pop-up locations including those at Kohl’s stores. It should be noted, however, that Kohl’s will stock Amazon products, just not in an Amazon-branded space. So Kohl’s has become a retail outlet for Amazon after all. Why bother with a pop-up store if Kohl’s will stock your merchandise, anyway?

Does the Strategy Work?

Data from Earnest Research suggests that the partnership is paying off for Kohl’s. After Chicago stores began accepting Amazon returns in 2017, “Chicago sales, transactions, and customer growth all outpace the same metrics nationwide for 2018,” according to Earnest.

And the relationship certainly makes sense for Amazon even if the pop-up stores have failed. Having Kohl’s as fulfillment partner attacks one of the headaches of buying online: ease of returns. And Amazon enjoys the services of a returns counter without having to own a brick-and-mortar store. Of all Amazon’s services, such as retail, advertising, cloud computing, retail remains particularly costly. It behooves Amazon to find better ways to contain expenses (which the company is doing based on its latest quarterly earnings report). Even the mighty Amazon needs partners 

Meanwhile Kohl’s is maximizing the value of its floor space in other ways, such as by leasing locations to Planet Fitness. And Kohl’s is not the only retailer leasing floor space. Macy’s has been leasing space to retailers such as Sunglass Hut and LensCrafters

What’s Next?

It will be interesting to see how this relationship unfolds. Will Amazon lean on Kohl’s to sell more of its products, such as its fast-growing stable of house brands? In fact, Motley Fool speculates that Amazon could buy Kohl’s outright. The notion isn’t that far-fetched (see Amazon’s acquisition of Whole Foods). Retail apocalypse or opportunity? Stay tuned.

Walmart Promotes a Kinder Black Friday – and a Possible Future for Retail

After treating Black Friday like a cattle round-up for years, Walmart is finally injecting a little humanity into the year’s worst shopping tradition. On November 8, the retailer announced measures intended to make Black Friday shopping just a bit more pleasant:

  • Walmart is serving four million cups of complimentary coffee (courtesy of Keurig) and a few million free Christmas cookies from the Walmart Bakery.
  • Walmart will make it easier for shoppers to find top deals in-store via the Walmart app.
  • Check Out with Me store associates stationed throughout the stores and equipped with mobile check-out devices will make it possible for shoppers to purchase items on the spot, thus avoiding long lines.

These changes are long overdue. But why aren’t more retailers improving the Black Friday experience? For years, as part of my first-hand research into Black Friday, I’ve stood in long lines with shoppers in the cold pre-dawn of this massive shopping day. I have waited Continue reading