An article in Business Insider (March 2, 2018 http://www.businessinsider.com/kohls-could-help-whole-foods-reach-millions-of-new-customers-2018-3) suggests that an alliance between Kohl’s and Whole Foods may provide a winning combination. Last year, Kohl’s started accepting return products for Amazon. Kohl’s has a network of 1,110 stores in suburban malls, offers a new set of customers, and wants to decrease its retail store footprint, thus this can help Whole Foods reach a new set of customers for its 365 label and help Kohl’s with retail space usage. In addition, Kohl’s has already announced an alliance with Aldi, so this may be a more diverse platform for grocery items. Should Kohl’s focus on Aldi alone and expand that relationship, or build a more custom store location dependent grocery plan, choosing between Aldi and Whole Foods, based on location ? Should these mini Whole Foods locations sell the private label Whole Foods brand along ? How might the ease of transacting with Amazon and the availability of inventory for immediate pickup help expand the Amazon and Kohl’s relationship ?
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There is no sportsmanship in business. Amazon pushing for the entire e-commerce market has made it difficult to for other relatively smaller companies like Kohl’s to compete. Kohl’s has been struggling with falling footprints into their stores and with Kroger and Walmart dominating the brick and mortar stores, it is most sensible for Kohls to try to increase its market share by widening its product range and moving out of suburban malls. Kohl’s has taken the right steps by partnering with Aldi and hence ensured better-located stores. Secondly, accepting Amazon’s return is the right strategy to survive instead of directly competing for market share with a giant like Amazon. Thus partnering with Amazon will retrieve the footprints of consumers coming into Kohls store and furthermore will increase its brand recognition. This will be of great benefit to Amazon as well. Amazon will not have to spend any money or drive into complexities to acquire a new company to achieve the capability of handling of nation-wide returns. Amazon also gets the benefits of using already established nationwide chain of brick and mortar stores without spending much on the infrastructure. Lastly, consumers gets the greatest benefit of ordering online and picking up goods from the nearest brick and mortar store or returning goods to a nearby location. Its a win-win for Kohls and Amazon.
It is an obvious win-win strategy for Amazon and Kohl’s. For Amazon, it can save a lot of opearation cost, by using the Kohl’s real estate, and warehousing cost, by tempory store return goods at Kohl’s store. For Kohl’s, the brand reputation of Whole Foods may help it to increase revenue by attract customers.Even for customers, based on Amazon’s experienced e-commerce management, Whole Food’s fresh grocery categories and Kohl’s rich offline network, they can have a better O2O(on-line to off-line) shopping experience.
However, for the operation strategy of Kohl’s, it should also consider the location to decide Amazon or Aldi to become partner at which area. Due to the marketing stategy of Whole Food may not suit for customers’ habit at some area, especially suburban or rural area. A trditional groceary supply chain opeartor, like Aldi, may be more experienced to meet the demand of customers at these area.
I think the partnership with Aldi and Amazon is a great strategy to stay in business. All companies can gain from exposure to each others client base and the strategic location of Kohl’s stores. Additionally, the partnership with Amazon can help Kohl’s to find innovative ways to deliver better customer service and new products and service ideas. The decision on whether Aldi or Whole Food should depend on the characteristics of customers based on location.
Kohl’s announced an alliance with Aldi with an overarching “right-sizing” initiative for the chain, which is seeing many of its stores take on smaller footprints with reduced inventories, in part as a response to effects of e-commerce on its business.
From the cooperation with Amazon, Kohl’s does stand to gain one very important thing it’s lacking now: traffic, and especially from younger shoppers. People who would never think of going Kohl’s now have a compelling reason to do so, when they want to return something to Amazon. For Amazon, the benefits will be “easier returns”, which hopefully will make it more likely customers will buy from Amazon in the first place. Also, Amazon is simultaneously reducing its overhead if it has another company’s people handing its returns for it.
Kohls should definitely stock with major grocery chain like Aldi and try out this model for an initial two years to see positive returns. If not, Kohls should look into other small grocery outlets to see if it fits in the demographic area. They may find that Aldi may work in some regions while other small grocery chains work in other areas. So, they might be more regionally based. If Whole Foods were to come in with their private label, they might as well have Amazon lockers in which it can act as a pickup area for Amazon packages. This would further help Amazon reach same day or next day delivery more efficiently.
Kohl should not only focus on Aldi because Kohl has lots of store and warehouse space for multiple company. It is an economic way to utilize Kohl’s resource and build a strong relationship with other company for future development like e-commerce vendor by one day delivery or shorter fast delivery.
Yes, the private label can increase company’s revenue and it has more high margin than other brand, but the layout must be fully considered, like the ratio of other brand and private brand, position and sales price which could magnificently affect customer’s experience at store.
Amazon as a fast growing internet company need some partner to develop Amazon’s reality store. Also Walmart become Amazon’s main competitor because of Walmart’s one day fast delivery which based on its numerous branch. At this point, Amazon need to find some other partner in the traditional retail area to win the future competition.
The grocery store preferred by people varies by location, in some region, Aldi is preferred, some places Whole Foods, and so depending on the popular stores in region and presence of those stores Kohl should select an appropriate partner. The private label can be sold in the stores as they are cheaper and Kohls customer base is usually looking for deals and lower prices. Additionally, it can make Kohls a one-stop-shop for people looking for lower prices and deals. Kohls allowing amazon to have its return product dropped can also further set up its pick up in Kohls, thus increasing footfall in Kohl stores and also Amazon can integrate its online grocery with Kohls for faster delivery, thus allowing Kohl to sell its inventory and also allowing for pick-up to a customer who orders groceries on Amazon. This will also help in a same-day pick-up.
In my point of view, Kohl’s may need some time to make further decision about whether they should focus on Aldi alone, or build a more custom store location dependent grocery plan. There are various consumer preferences regarding to geographical difference. Also, the financial result of alliance with Aldi is also an indicator. After a solid observation and research, can Kohl make this decision. As for if private label products can be sold in mini Whole Foods locations, it depends on what the specified regulation says and what the two companies’ overall alliance strategy. However, if yes, this will definitely improve the competitiveness of local stores in local regions. By cooperating with Amazon, Kohl’s benefit a lot in terms of Amazon’s fast delivery and therefore enhance Kohl’s availability of inventory due to reduced lead time. To stay or expand this relationship, it is important to maintain great profitability benefits for both Amazon and Kohl’s. For Amazon, Kohl’s indirectly helps them expand their off-line business. The sweet point here is how these two companies can continuously grow by bringing into play their respective advantages and strengthen the cooperation in terms of logistics, warehouses, and retail stores.
There is no doubt that Kohl should work with Aldi, Wholesale, Amazon or other similiar companies, because Kohl has a network of 1,110 stores and can make full use of this great competitive power.
A wise strategy is adopting VMI system. Amazon has many huge warehouses, if Kohl can use Amazon’s warehouses instead of building its own logistic system, that could save a lot fixed cost. By the way, Kohl can also use Amazon’s inventory control system, like RFID, to create a database and adopt big data method to manage its customers.
Immdeiate pickup definitely decreases lead time and can decrease holding costs, in-transit costs, which will also help to save Kohl lots of money.
The coordination will be a win-win strategy for all the mentioned companies in the article. Kohl’s partnership with Aldi and Amazon is good to expand its customer base and has a better use of its real estate, while Amazon can save the extra operation cost; and Aldi can develop its market because of the diverse platform in Kohl’s. As a result, I don’t think Kohl’s should only focus on Aldi alone. Instead, the company should consider working with Aldi and Whole Foods based on location.
Kohl’s strategy of alliance with Amazon, Aldi and Whole Foods to target a new set of customers makes complete sense as it increases Kohl’s profit by optimizing its retail space usage.
Particularly with Amazon’s fast and reliable service and vast customer demand, Kohl’s offer to pick up and return products can reduce Kohl’s fluctuating demand rate and inventory and is profitable for both the companies.
Alliance with grocery stores is also a diverse idea targeting on a different sector of people. If Kohl’s already has a tie-up with Aldi, then the extent of its association with Whole Foods depends on the terms of the contract between the former two.
Having a separate custom Aldi or Whole Foods store based on the demand and location is also a good idea.
Kohl’s has a high retail footprint, however the number of customers visiting the store is decreasing. Under these circumstances, partnering with Amazon would increase customer visits in the store and would open avenues for increasing sales.
While Aldi caters to a much larger market segment, Whole Foods cater to a very specific segment. In my opinion Kohl’s should focus on building their partnership with Aldi to reach out to majority of the customer base. To what extent the relationship with Whole Foods can be developed depends on the contract terms between Kohl’s and Aldi, but we could look into exploring the partnership in certain areas since Whole Foods is also looking into expanding its business at this point, it may result into a win-win situation for both.
I believe the choice between Aldi and Whole Foods is totally a strategic decision. Having a partnership with just one of them may not be fruitful in the long term. Kohls should build a more custom store location-dependent grocery plan, choosing between Aldi and Whole Foods, based on location to drive revenues better. It is essentially a decision based on availability of these stores in various locations. Mini Whole food locations in suburban malls have the potential to prove profitable for private label products in suburban locations given the new sets of customers. The improved acceptance of return goods and immediate availability can improve lead times and for Amazon and also provide its customers with more flexibility. This surely will improve Kohl’s relationship with Amazon from a customer retention stand-point.
The partnership between Kohl’s and Whole Foods or Aldi is definitely a good way for Whole Foods or Aldi to enhance their market presences. It is also a great attempt for Kohl’s to diversify its service. As Kohl’s has a large network of stores over the nation, to match the communities’ need, the decision of whether partnering with Aldi or with Whole Foods should be based on the location characteristics of individual stores. However, both parties in this partnership also need to carefully measure their overall benefits from the partnership. For Kohl’s, selling Whole Foods products or handling immediate pickup for Amazon may be a good way to ease the pressure from e-commerce in short-term. But in the long run, the partnership may eventually turn Kohl’s itself into an Amazon pickup location as some of traditional Kohl’s customers may get used to shop on Amazon and pick up at Kohl’s. For Amazon or Whole Foods, the expansion of their presences in brick-and mortar malls might bring them additional cost, which would cripple their advantages to traditional department stores like Kohl’s.
Amazon has been trying to get into the brick and mortar store space for long now. We are seeing eCommerce companies come a full circle, and trying to get the customers to do the last mile by walking to the nearest delivery store.
Kohl’s partnership with Whole Foods will definitely help it come out of the slump which it has been seeing in its sales. The Amazon brand name will get people back into Kohl’s store and it will be a win-win situation for both the companies.
It is possible that Amazon decides to take over the pan America Kohl’s store network and achieve its vision of having a substantial brick and mortar presence
Kohl shouldn’t focus on Aldi alone to expand its client base. It should set up it’s ties with both Aldi and Whole Foods so that it can increase it’s clientele. This will increase their top line. They can attract each other’s client base and lower warehouse and retail store costs. This will lower operations cost thus increasing the bottom line. Availability of inventory for immediate pickup will also help capture more customers. They should however choose between Aldi and Whole Foods based on the locations.
Kohl does not need to focus solely on either Aldi or Whole Foods when pursuing its grocery expansion strategy because by using both channels, Kohl can expect to attain more customer bases. In addition, those companies can share their operating information such as demand forecasting to achieve better coordination with lower costs in warehouse, inventory, and transportation management. By working together, both Amazon and Kohl could get benefits simply because of higher chance of brand exposures to each other’s customers. In short, because in this case Kohl is getting into grocery business by using existing market channel, there is no reason to limit the number of partners to one or two as long as those partners are competing one another on the same product category in the same location.
For companies, alliances are definitely a good strategy. It can combine the advantages of each companies and make up for the shortcomings to achieve a win-win situation. Kole’s should first focus on Aldi. Discount supermarket chains like Aldi can help Kohl’s build more custom store locations with lower product prices that will attract more customers. After a few months of trial runs and reviewing the results, we can consider other decisions, such as an alliance with Whole Foods. These two markets are completely different styles, and companies should assign partners based on location. Whole Foods should also sell its own brand along, which can increase the income of healthy people who like to eat organic food.
Kohl should make location-based decision to cooperate with Aldi or Whole Foods to enhance its unique presence at remote areas. The reasons are as follows: firstly, Whole Foods only focuses on high-quality organic food products, which is accompanied by high prices, while Aldi provides customers with full range of low-price daily necessary goods. To customers in remote areas, different levels of economy also determine different levels of consumption. Hence, it is important to diversify its footprints according to different target groups of customers. These mini Whole Foods shops could sell the own brand as it is a good way to expand the range of products available to customers. On the other hand, the ease of transaction with Amazon would help Kohl speed up its importance of presence by relying on the high level of demand of services generated from Amazon, for example, the returns of goods. Meanwhile, the availability of inventory for immediate pickup would also contribute to higher efficiency in end-to-end delivery of Amazon, especially in remote areas. Hence, it is a win-win cooperation that would benefit both of Kohl and Amazon.
I believe kohl’s should focus on both Aldi as well as Whole Foods. As it is already partnering with amazon as it’s return site, it wouldn’t be difficult to negotiate a contract with Amazon owned Whole Foods. Furthermore, Kohl’s can try and identify stores and conduct a trial run for both Whole Foods and Aldi and judge by their performance as to whom to partner with in the long run. Whole Foods should sell it’s private label at the mini Whole Foods location as they can be also used by Amazon to provide grocery delivery to it’s customers from the new inventory holding location that Kohl’s provides. Such a partnership is a win-win situation for both Kohl’s and Amazon as Kohl’s is reducing it’s store size and in turn reducing it’s operational cost and Amazon is getting a new inventory holding unit at Kohl’s store.
I believe that Kohls should focus on both Aldi and Whole Foods. As mentioned in previous comments, Aldi has its own distinct shopper demographic; they are more price conscious and not worried about brand names. Whole Foods’ customers are less price sensitive and place value on the qualitative characteristics of their food (non-GMO/organic, etc). Kohls should isolate both of these partnerships in a strategic way that leverages the demographics around them. As it is well known the mall environment is becoming less popular with the rise of Amazon. Kohls made the smart decision to partner with the enemy knowing that if you can’t beat them, join them. I believe Kohls is making intelligent partnerships that are able to hedge the risks that the mall environment will continue to feel the tightening pressure.
Kohl should consider going custom with its grocery store plans. Having strategic plans with Aldi and Wholesale Foods both would not only give Kohl’s a wider client base but also better bargaining power in the market. Also, when it is trying to decrease it’s retail store footprint, Kohl’s should look at the bigger picture and have sustainable relationship with various players as it would help Kohl’s to expand further and also use its retail space to the best of use with generating returns in form of revenue. Also, this would give Kohl’s, Wholesale Foods and Aldi operational efficiency and help make the entire process well coordinated, structured and more efficient. Having a contract with Wholesale Foods would also strengthen Kohl’s relationship with Amazon as Wholesale Foods is owned by Amazon. Having such a multiplayer arrangement under one roof would help compete with much bigger players like Kroger and Walmart in the market.
Personally, I think Kohl should go for the strategic alliance with Whole food. By doing so, Kohl would diversify its grocery portfolio, which in turn would expand its customer base. Even though both Aldi and Wholefood offer the same type of products, there is a difference between two grocery stores in the eye of the customer. Most if not all customers will classify wholefood as the high-end grocery store and Aldi as the low-end grocery store. Therefore, the customer base for those two grocery stores is entirely different. There is no overlapping. Therefore, adding both of them will double the new customer base for Kohl. I agree that Kohl should decide where to have Aldi and wholefood based on the location of the kohl. For instance, in the affluent neighborhood, kohl should choose wholefood whereas, in the relatively poor neighborhood, kohl should go for Aldi. For the area filled with most the middle-class people, having both is also a choice for kohl. In addition, I think both Whole food and Aldi should keep their private label because the brand image is the main driver for attracting new foot traffic to the Kohl. Increasing the foot traffic would increase Kohl’ revenue by the increase in the impulsive buy for kohl’s products. To me, the partnership between Amazon and Kohl is a win-win situation. Amazon elevates customers’ satisfaction rate by providing instant return and pick-up at a local store for free. On the other hand, allowing Amazon customers to return and pick up at kohl store will increase the foot traffic in the store. As with partnership with Aldi and Whole food, the increased foot traffic in the store will, in turn, become additional revenue for Kohl.
As a mature retailer, Kohl’s is trying to use the combination with Amazon to expand the flow of customers and the number of orders. The question is pretty simple here like does Amazon’s customers have overlapped with the Kohl’s? Because if those two groups of customers are totally overlapped, then from the analysis, the whole cake won’t expand since the Kohl’s actually become one of the pick-up locations serving for Amazon. But if those groups are not the same at all, or partly different from the buying habits, things are getting interesting.
For the Amazon, undoubtedly, this new corporate relationship will become an effective way to get their order picked-up, at the same time, people who are only interesting in online shopping will have more chances to the brick store. In other words, the flow of customers’ turn-over will be increased somehow.
And if we take this mode of business more deeply and detailed, let’s think about some categories that online shopping couldn’t fully cover, like some fresh groceries or other products with highly specific customers. It will be a huge burden for e-commerce runner if take everything including mentioned above as their daily selling because they have to pay for more footprint of inventories and management cost.
For my perspective, Kohl’s should focus on the categories that they don’t have yet, and introduce them as the corporation relationship into their store. Thus, choosing from Amazon and Aldi based on different areas or cities could be a good one to solve the problem.
Partnership with Aldi has helped Kohl attract new customers and boost its revenue .Kohl should also plan to partner with Whole foods and strategically decide the location of the stores as it could help increase sales and increase customer retention and help other partners such as Amazon to reduce the lead time of returns.. Kohl and Amazon’s partnership has not only provided risk free and low-cost way to expand its presence in Brick and Mortar but also provided Amazon benefit from impulse purchases by in-store shoppers.
Both Aldi and Kohl’s cater to a similar demographic of customers, those who are price conscious. Whole Foods caters to a customer demographic that is not price-conscious. They are willing to spend more money on higher quality products. Location can play an important factor in selecting which grocery chain goes into the stores, but 9 out of 10 Kohl’s are in suburban strip malls. Most whole foods are not located there. There is a location mismatch between Kohl’s and Whole Foods but not with Aldi. Whether selling their brand or not doesn’t matter, if they are already selling their brands in their existing stores, customers will recognize the quality they get for 365 branded products is great for the price.
Amazon and Kohl’s can leverage each other to have a very successful business model. Kohl’s has the physical presence that Amazon lacks. Kohl’s could offer a display of Amazon products that are frequently sold based on the demographics of that region and have those products in stock at all times. However, Kohl’s faces a challenge when it comes to forming partnerships with Amazon. There are many other big box stores that can compete with Kohl’s for Amazon’s partnership. Even small mom and pop stores can form partnerships that can sell and receive Amazon products. These smaller stores will have contracts similar to the thousands of independent suppliers that Amazon currently has. So, Kohl’s should partner with Amazon in certain segments of its business and continuously evaluate its position to increase the offerings through the partnership. This will help Kohl’s transform itself and not go out of business.
As mentioned in the article, Kohl already has a working relationship with Amazon as it is selling Amazon devices in its stores and offering free returns for Amazon products at several locations. A partnership with Amazon owned Whole Foods would be easier and familiar for the company. Kohl has already downsized 300 of its 1,100 stores for other retailers in the food and convenience stores business to attract customers.
Walmart’s customer base includes 100 million households, whereas Kroger’s includes 80 million. Getting more shelf space at a retailer like Kohl would heavily benefit companies – specially someone like Whole Foods as it would introduce a new customer base of price conscious customers. If a partnership is formed, Whole Foods should sell their private label as well as not only a source of revenue, but also advertising.
It would be a great strategy for the benefit of both Kohl’s and grocery industry to collaborate by Kohl’s providing its shelf space and Whole Foods & Aldi providing more variety of products in-store in Kohl’s to attract broader customer base to shop at Kohl’s. Product assortment to be sold in each store may depend on the location of Kohl’s store, in addition, Kohl’s also accept the return products for Amazon. The brick and mortar & e-commerce collaboration can provide easier shopping experience and in return attract more customers eager to shop with them. The availability of inventory for immediate pickup would benefit Amazon and the attraction of broader customer base in-store would benefit Kohl’s.
Kohl has an advantage of having business at a retail sphere with Aldi and online with Amazon. To compete with competitors such as Walmart, Kroger and Cotsco, this valuable partnership with Amazon owned Whole Foods and with Aldi will serve as an arsenal.
Aldi being a low budget grocery store chain will serve as an expansion catalyst for Kohl and similarly with a backup of Amazon can cater to wider customer array. Amazon with this partnership should also sell the whole food private labels to increase the visibility with Kohl’s customer as well. With the trio of amazon, Aldi and Kohl a larger customer could be targeted which can be effective in tackling competition and increasing profitability for all the companies
Kohl’s can definitely benefit from the alliance with Amazon, Aldi. The advantage of the store alliance can provide better product diversity to lower the unnecessary competition. Also, Kohl’s can expect the sales improvement and extra profits from Amazon’s service. However, it can be risky to cooperate with your competitors, especially the bigger player, Amazon. Amazon is attempting to dominate the grocery market with its outstanding eCommerce model, Kohl’s also can’t ignore the potential threat that Amazon will tend to gain more control over the supply chain and lower Kohl’s profit in the long run.
amazon focuses more one ecommerce. Physical store is what Amazon lacks of. Kohl will help Amazon in improving customer experience. Kohl also can get more exposure thanks to Amazon’s influence and stream. It would lower Amazon’s inventory and increases Kohl’s. This trade-off will depend on whether how much Kohl needs stream and exposure.
Although Kohl’s alliance with Aldi and Whole Foods will allow customers to choose from a broader pool of grocery items, Aldi might not like the idea of sharing the store with Whole Foods. The motive of reaching a new set of customers for the 365 label can get hurt if Aldi can sweep those customers to itself. The presence of a competitor in the same store can hamper the existing relationship between Kohl’s and Aldi and in addition, impact the deal Kohl’s is currently having with Aldi. It is therefore beneficial for both Kohl’s and the grocers to dedicate a store to one grocery chain at a time.
Amazon is currently working on providing physical pick up and return point to its customers. Building relationship with Kohl’s is definitely a good strategy. Instead of building or paying rent for an Amazon store, utilizing Kohl’s stores can save quite a lot of money. For Kohl’s, working with Amazon could save its business. Kohl’s does not have any advantage when competing with leaders in brick and mortar markets. Working with Amazon allows Kohl’s to have more customer awareness and exposures. This can be seen as free marketing. Amazon and Whole Foods’ customers now become Kohl’s potential clients. I would say that Kohl’s should develop strong relationship with Amazon to achieve a win-win situation.
Most of the Kohl’s stores are located in suburban strip malls, catering to a particular segment of customers. And, this is a great opportunity for Kohl’s to expand its customer base and market share by building a more custom store location dependent grocery plan with both Aldi and Whole Foods. However, Kohl’s should choose the locations of stores wisely to avoid the conflict of interest between the private labels of Aldi and Whole Foods.
Partnership between Whole Foods and Kohl’s is definitely a great strategic move for Amazon. Amazon will be able to reach more customers through the brick and mortar stores of Kohl’s and also provide a better customer service. On the other hand, Kohl’s will gain a higher brand recognition through Amazon owned Whole Foods.
Its always good to have a healthy competition. Kohl’s should definitely consider choosing both Aldi and Whole Foods to expand its grocery items market. This gives Kohl’s an advantage as the competition will just increase the store footprint, whereas in Aldi’s and Whole foods perspective, it will give them new set of customers and also a platform for them to sell their private labels. However, the choosing must be selective to location. Customers have preferences and considering these preferences of brand of food consumed, can further increase the footprint in the store. Whole Foods should definitely consider selling their private label at one of these outlets, as the increased traffic into the store will only help advertise the private label of their stores as most customers of Kohl’s are discount hunters. Having a partnership with Kohl’s gives Amazon the advantage of saving the cost incurred in taking trips to customer residence to pick up returns. This also eases Amazon’s return policy significantly. From the perspective of Kohl’s, the partnership, will increase the amount of traffic moving in and out of the store, which will in turn help potentially have more customers making purchases at Kohl’s
Kohl’s should consider a way by which they can accomodate both Aldi and Whole foods. This situation that Kohl is in should be an obvious choice to make. While partnering with Aldi improves it’s competitive edge, the opportunity to be a return portal for Amazon makes increases exposure of the company which translates to profit at some point. The situation seems a no-brainer for Whole foods as well. The fact that they may be able to increase their brick and mortar footprint by a minimal investment, can only be viewed as a perfect opportunity for Whole Foods too. Kohl’s will be in the unique situation of gaining visibility with a large e-shoppers, by serving as the conduit for the returns pouring through. Kohl’s should therefore find a way by which both Aldi and Whole foods is accomodated. The ease of transactions should serve only as an accelerator to the deal being complete. The scenario is a win-win for the parties involved.
Traditionally Aldi’s customer base is quite different when compared to that of Whole Foods. While Whole Food’s customers are mainly those who prefer organic foods, Aldi’s customers are driven by lower prices. Also, most of Aldi’s stores are smaller in size and are present within the busy streets of the city. Because of these differences, and given the fact that Aldi is looking to expand** into suburban areas, Kohls should focus on building a strong relation with Aldi. Futhermore, With a dual partnership, there is a risk of Kohls trying to match the competencies of Aldi against Wholefoods and vice-versa leading to a possible price reduction war and Kohls ultimately losing deal with either one of the companies.
Since Amazon is also looking forward to establish local stores, the availability of inventory and immediate pickup facility will only help the former to strengthen ties with Kohls.
Source** – https://www.forbes.com/sites/phillempert/2018/08/09/aldi-is-focused-on-keeping-it-simple-and-high-quality/#615925da427b
With reduced inventory, Kohls is planning to optimize the space utilization. Leasing a space to ALDI is one of the strategic decisions taken to make Kohls location more comparable to Walmart & Target & to grab a significant share in grocery. This will help ALDI to high visibility locations belonging to Kohls.
In terns, Kohls will get benefited with more consumer visiting jointly at Aldi & Kohls with combined interest. For grocery consumer go for regular purchase, these frequent visits make Kohls to capture additional business.
ON the other hand, Whole food trying to include more broader array of consumer in its portfolio.
Increased consumer visit to location after tying up with Kohls will benefit Whole foods to greater extent than current. Whole Foods will get immediate access to the bargain-hunting customers that Kohl’s attracts. It would also give Whole Foods a lower-cost way to expand its 365 chain, since it would be moving into existing buildings of Kohls rather than paying for new construction.
So in my opinion,deal with ALDI is in favor of Kohls,whereas deal with Whole food would be more attractive for Whole food.
Both tie-ups will helps Kohls on inventory availability & hence more responsiveness to make Amazon-Kohls working more efficient & effective.
Kohl should work with Aldi, Wholesale, Amazon or other similiar companies, because Kohl has a network of 1,110 stores and can make full use of this great competitive power. Amazon has many huge warehouses, if Kohl can use Amazon’s warehouses instead of building its own logistic system, that could save a lot fixed cost. Immdeiate pickup definitely decreases lead time and can decrease holding costs, in-transit costs, which will also help to save Kohl lots of money. The strategy will increase Kohl’s profit by optimizing its retail space usage
Even though Aldi and Whole Foods are in food business, they deal with different kind of foods, and have different pricing strategy. So Kohl’s should consider in becoming an alliance partner with both of the companies. This will help Kohl’s increase their business, as well as decrease their retail store footprint. This in turn ease both Kohl’s and Amazon’s business, as Kohl’s will increase their clientele and Amazon will have places for their inventory.
Kohl has been losing its sales with the competition with e-commerce and changing customer preferences. Diversification of its offerings will definitely help them but it also depends a lot on the kind of product they are adding. Customers out of all their needs choose to pick certain types of the product themselves and ordering certain online. The tangible and prior touch before the purchase is not so important for certain items. Hence, it is more important for Kohl to analyze the data that they generate across its chain to better strategize alliances.
Though roughly, an alliance with whole food and Aldi would be beneficial as they offer a clear cut diversification to Kohl. This is also supported by the fact that other chains are now becoming an end to end purchase marts from clothes to cooked food available under one roof.
An alliance with Amazon would flourish as it gives amazon the required boost they need to star gut their prime program. This will also help their logistics and delivery partners.
In a grocery business, the margins are very small. The strategy going forward is to open numerous stores at different locations.
The tie of Kohl’s with Amazon is a very well established partnership, expanding the grocery business with Amazon may not be a long term decision, since Amazon has already started grocery business in other countries such as India, and with the Amazon Go store commencing in the US, selling groceries can also be achieved. The tie-up with Adil makes more sense by forming a new partner and establishing another relationship.
Kohl’s should go ahead with Aldi and form a strategic relationship for groceries. As for Amazon, Kohl already has a relationship with Amazon, handling their return deliveries.
Getting into the same business with two partners will increase unnecessary arguments, price reduction wars, and service level wars. This will eventually lead to the crumbling of partnerships and eventually, Kohl will lose out.
In my opinion, Kohl’s partnering with Amazon-owned Whole Foods is a good strategy. The offline grocery market is dominated by big companies like Walmart and Kroger. In order to survive long term in the market, Kohl’s needs a strong partnership with a big online competitor like Amazon. This strengthens their already existing partnership.
For Amazon, the unique singular suburban format of Kohl’s stores puts Whole Foods price-efficient branch ‘365’ in the right customer segment footprint for which aligns with Kohl’s. It also offers visibility to its high-end Whole Foods private labels to upgrade some customers. Secondly, it offers speed to market with immediate expansion given the availability of infrastructure and staff.
However, the choice of ALDI versus Whole Foods is a critical one based on footprint, demographics and Kohl’s own sales targets in a way where Kohl’s can coexist with another chain.
Amazon is considering within a day delivery seriously and thats where Kohl can earn business by insuring ties with both Aldi and Wholesale foods. With greater inventory and customized groceries, Kohl can fulfill more demands on Amazon and hence, be the supplier of choice for one day groceries with Amazon. Kohl’s extensive presence and warehousing capacity will add to the benefit.
Although Aldi and Whole foods are retailers, both of them offer different kind of product so Kohls should consider partnership with both of them. This will help Kohl decrease there retail footprint and increase the sales and hence Kohls should consider partnership with both
The article suggests that Whole Foods is trying to appeal to a broader array of customers through lower prices, like the customers that are already attracted to Kohl’s. Therefore, building a custom store location dependent grocery plan could be more advantageous for Kohl’s. In area where an Aldi is already nearby a Kohl’s then Kohl’s could incorporate Whole Foods into their store and vice versa. Although managing the two relationships might be difficult, the flexibility in planning and offering outweighs it. If Whole Foods were to strike a deal with Kohl’s, they should try and sell more than just their own private label inside. Customers who shop at Kohl’s are bargain shoppers and it is likely that they have never been to a Whole Foods before, so to make the store more attractive to them these type of customers, Whole Foods should carry a wider array of products that can be sold at lower prices.
The ease of transacting with Amazon and the availability of inventory for immediate pickup would greatly expand the relationship between Kohl’s and Amazon. If a deal was struck between Whole Foods and Amazon, trucks delivering groceries for Whole Foods at Kohl’s could pick up the return products for Amazon and take them back. This would greatly reduce dead head travel of trucks and create great savings that could be passed onto the customer.
As the market currently stands, there is not much holding back Kohl’s from opening retail locations with both Aldi and Whole Foods. Aldi only has 10 pilot stores at Kohl’s locations, and the retailers have yet to determine if this partnership is worth expanding. Kohl’s can afford to experiment with both retailers, and Kohl’s shrinking market position means they cannot afford to be too exclusive with their partnerships. If these partnerships expand, Kohl’s should determine which grocer is a better fit for each location, and choose accordingly. Aldi and Whole Foods have different brand reputations and often cater to different consumers, so the partnerships should be localized.
The ability to drop off packages at retail locations for free has become widely adopted, and would not be a significant differentiator for Kohl’s. While a lack of this service could lead customers to competitors, this features is not likely to drive significant volume to Kohl’s stores. The people who are likely to use this feature are the people who already shop at Kohl’s. That said, there are other opportunities for the retailers to work together. If Whole Foods was integrated with Kohl’s, and if customers were able to order both Whole Foods and Kohl’s products through Amazon, that would incentivize customers to shop at Koh’s vs other retailers. This would allow customers to get their groceries, pick up products, and have a retail shopping experience all at the same location.
For Kohl’s to be a real contender in the grocery industry it can not put all of its eggs into one basket. They need to continue to build relationships with existing grocery market players to coordinate a worthwhile experience for their customers. Kohl’s has already announced their partnership with Aldi, but they should not stop there. By partnering with Whole Foods as well, Kohls will be positioning itself among the top contenders in the grocery market. With the new design of the store after the partnerships, new customers will be going to the stores when they had not previously been going to Kohl’s stores. If Kohls fully utilizes the partnership it forms with Whole Foods, I believe that they should continue to sell their private label foods. These private label foods that Whole Foods has is the entire reason their customers shop there. The customers don’t mind paying extra for these items, so it would be in Kohl’s best interest to sell these items. Kohl’s has taken advantage of their partnership with Amazon to help expand their customer base. After a customer has returned an Amazon product at Kohls, the customer then receives a coupon to shop in Kohls that they can use immediately. This is a perfect offering because once the customer is there to drop off an item, they are more likely to browse the store and to buy something. If they do not buy something in the store that day, it is still an important offering because it allows the customer to have an in person view of the total organization offerings.
The partnership that Kohl’s have with Amazon is helping them to incentivize customers to purchase products in their physical stores while providing Amazon thousands of drop off points for returns. It was interesting to read that Kohl’s started as a grocery store and then converted to what it is already. After reading about this partnership online, Kohl’s stores are shrinking and partnering with Aldi would help Kohl’s to offer more diversity of products to customers and was an opportunity worth exploring, but this initiative is still limited to few stores.
Having a similar partnership with Whole Foods could be interesting as the stores have already an agreement with Amazon. However, this could be a risky move, given that Amazon competes with Kohl’s in online sales. Given Amazon’s history, depending much on this partnership could doom Kohl’s.
Having Whole Foods products in Kohl’s stores can make them more attractive to customers and incentivize people to purchase more in the stores while helping Whole Foods to reach millions of new customers. From a material flow perspective, this could help to make more timely and cost effective transportation. However, Whole Foods is perceived as a Premium Super Market and being in a place that is known for having constant discounts could backfire. I believe it would be a riskier move for Whole Foods that it is for Kohl’s.
For these reasons I believe a partnership of this kind has little likelihood of occurring.
I think the overall decline in customer traffic is forcing Kohl’s to look for ways to improve the appeal of its stores. However, the company needs to determine what kind of partnership it pursues. If the priority for the company is only the issue of renting free premises, then it does not matter who will rent it. However, a partnership with Amazon can be strategic. Both companies can complement each other. Amazon corporation is pursuing an aggressive policy towards expanding its business. The acquisition of Whole Foods in 2017 and the ambition to become the logistics giant of no doubt are step-by-step movement towards that. Therefore, strategic partnership development would be of interest to both companies.
This partnership may involve the Whole Food brand. However, if this brand does not compete with the goods sold in Kohl’s stores. Such a mutually beneficial partnership in exchange for concessions in another area could be signed between the companies.
By pooling Kohl’s inventory, Amazon will be able to significantly save on shipping costs and inventory holding costs when selling Kohl’s goods. In addition, Kohl’s will be able to accept goods returned by the online retailer’s customers and sell them at a discounted price. The benefits of economies of scope for both companies are obvious.
For Amazon, I think that building relationship with Kohl’s is definitely a good strategy. Amazon has been focusing on e-commerce in the long run and is currently working on providing physical pick up and return point to its customers. Physical store is what Amazon usually lacks and Kohl can help Amazon with providing better shipping experience to the customers. For Kohl’s, the partnership with Amazon can help it compete with others in brick and mortar markets. What Amazon offers allows it to save more cost. Moreover, it can help strengthen the brand image in customers’ minds.
Therefore, I think this cooperation will result in a win-win situation.
In my opinion, Kohl’s should go with custom store location dependent grocery plan, choosing between Aldi and Whole Foods, based on location. If a certain location already has an Aldi store, it would be optimal for Kohl’s to rent out some of its space to Whole Foods and vice versa. Kohl’s should take a strategic decision and partner with both of them to lay out long term implications.
Amazon owned Whole Foods should also sell the private label products in order to increase their visibility with Kohl’s customers. Collaboration of Kohl’s and Amazon would be driving more traffic to stores, exposing the grocery chain to tens of millions of new customers, increasing the possibility of gaining higher sales in private label product category too.
The ease of transacting with Amazon and the availability of inventory for immediate pickup would surely expand the Amazon and Kohl’s relationship. If customers dropping off their amazon package find something to buy, this could ring up the sale at Kohl’s. On the other hand, Amazon would be saving transportation costs because customers are absorbing such costs by driving to selected Kohl’s stores. In short, a win-win strategy for both Kohl’s and Amazon.
With the challenges faced by retail stores in this time of digitalization, Kohl’s should explore as many as partnerships as possible. Focusing on Aldi alone might limit the options. Therefore, building a more location dependent grocery plan can increase the flexibility of the strategy and identify the areas that worked well. Different locations have unique operation strategy and clientele thus the plan should be adapted based on locations. Selling the private label can attract more customers thus increase revenue. Also, it might attract other grocery chain’s customers and create competition. The original customers can be retained as well. Adding physical stores for an e-commerce company is always beneficial, even if just use them as warehouses. For Kohl’s, healthy relationship with Amazon can increase the foot traffic inside the store thus might generate impulsive purchases from those pickup customers. Therefore, it is a win-win situation and coordination can be achieved.
I think Kohl’s is implementing an impressive strategy to appeal to a broader customer base by offering more variety in one stop. It makes sense to customize the grocery plan depending on the location, provided that Aldi and Whole Foods appeal to different geographics. This idea could also be expanded to the portfolio and brands they should offer based on the differences per region.
As per the deal with Amazon, this was something expected since Amazon has been looking to expand its footprint in physical stores in the past few years. It is a potential strategy to provide readily available inventory through Kohl’s locations. This present opportunities to Amazon and other retailers to expand without greater investments in real state, as well as Kohl’s to diversify its revenue through these partnerships.
Overall, I think Kohl’s choice and strategy are very wise. First of all, as a grocery store with a certain scale and popularity, Whole Foods has a high degree of recognition in the hearts of consumers in many regions. The cooperation with Whole Foods can help Kohl’s enter the market faster. At the same time, due to Kohl’s own more than 1,000 stores, cooperation with Amazon will also be a win-win choice. First of all, it can provide Amazon with a more efficient return channel, which will undoubtedly save Amazon costs while enhancing competitiveness. Secondly, based on Amazon’s huge user base, it will also bring more potential consumers to Kohl’s. This will also improve the relationship between Amazon and Kohl’s and lay the foundation for more potential future cooperation opportunities.
I think it is perfectly okay to go for a custom setting with Kohl’s staging products from Aldi and Whole Foods. From the point of view of Kohl’s, it does not make sense to create a singular lasting relationship with Aldi as it would only limit its reach to wider customer base. People would have different priorities regarding the place/ platform they buy from. Staging different grocers would increase the footfall as they would have the element of choice and comparison. Agreed, that too many choices create confusion, but having a few would actually create a healthy sense of competition among the chains and increase the customer base.
From Kohl’s perspective, the company should definitely leverage more opportunities not just with Amazon & Aldi but also with other grocery chains to increase the variety at the Kohl’s stores in a way that could expand Kohl’s customer base and bring in more margin. The decision of which grocery chain could be based on the location, proximity, or even the preferences of the customers in that area. This custom approach might increase some overhead & complexity for Kohl’s, but a thorough cost-benefit analysis along with an analysis of the strategic long term implications of these options should be done prior to taking any decision.
From Amazon’s view, it can leverage Kohl’s physical stores to increase its presence and access to customers. In addition, Amazon would also save costs from both the initiatives i.e. the returns to Kohls and selling groceries (whole foods) at Kohl’s outlets.
Hence, it seems to be an easy call for both Amazon and Kohl’s but a final decision should be made only after analyzing the long-term strategic consequences.
From my perspective, Kohl’s should establish a more custom store location dependent grocery plan, choosing between Aldi and Whole Foods, based on location because although Kohl’s has already built a relationship with Aldi, they are just in the test process and there’re only 10 of them compared with 300. Besides, different stores have different customer base so that locations might be different. Some locations may be fit for Aldi and others may be fit for Whole Foods. They should choose the best partner based on the location to maximize the possible increase of customers as well as diversify the products.
Those mini Whole Foods should sell their own brand. Like I said before, they choose the location based on the customer base. I believe the reason why customers choose Whole Foods is because they have the products and brand they prefer which can’t be purchased in other stores. By doing this, they can not only attract more customers to shop in the store, but also increase and consolidate their impact in that area.
The relationship will be enhanced because of the ease of transacting with Amazon and the availability of inventory for immediate pickup. With the existing return policy, more customers will be attracted to shop at Kohl’s for those Amazon products. For Kohl’s, this could help them increase the customer base. For Amazon, it would give them immediate access to the bargain-hunting customers that Kohl’s attracts and expand their chain. It’s a win-win strategy for both of them.
This reminds me of what IKEA, a furniture retail company that offers dining service, has been doing. For Kohl’s, there’s no doubt that attracting other retail partners such as grocers to move in would improve customers’ experience thus bring win-win benefits. I would recommend that Kohl’s builds a more custom store location dependent grocery plan based on location. Because operation philosophies for Aldi and Whole Foods are different, Aldi mainly provides discount grocery, while Whole Foods focuses more on the high-quality grocery. In suburban areas, people have specific preferences, so it’s important to identify customers’ tastes. However, I also think it’s possible that Aldi and Whole Foods exist in the same location inside Kohl’s, especially in those core areas where different customers would stop by, but this requires more time to test. People may go to Whole Foods which are inside Kohl’s for two reasons-First, plan for Kohl’s but indirectly for Whole Foods. Second, plan directly for Whole Foods. Although I think selling private label brands can help Whole Foods attract more customers who directly would like to come and buy what other grocery stores don’t have, it’s also necessary to at least keep some general brands for those customers who just want to buy ice cream after shopping. Anyway, more pilot tests should be done to see which way should take. The ease of transacting with Amazon and immediate pickup provides Amazon a way to “appear” in the brick and mortar stores, especially for those customers who go to Kohl’s for bargains. Even if you don’t have Amazon Prime, you can drive your car to grab exactly the same products sell online in Kohl’s without waiting for shipping. For Kohl’s, it will attract more customers. So clearly this relationship between Amazon and Kohl’s is beneficial for both.
Although Kohl’s has already established a network of 1110 stores, the target customers of Aldi and Whole Foods are different, and according to the article, its network covers suburban areas. Kohl’s should partner with both Aldi and Whole Foods to build a custom store location according to the target customers in the surrounding residential areas and provide diverse services and products to the local community.
As mentioned, the alliance with both Aldi and Whole Foods could allow Kohl’s to provide a larger variety of products to the local customers, this could fulfill the demand of a different group of customers. But carrying the Whole Foods brand alone is definitely not a good idea. Only selling Whole Foods products would weaken product diversity and lose customers who are looking for other brands.
The ease of transacting with Amazon and the availability of inventory for an immediate pickup could significantly enhance the customer service of Kohl’s. Amazon focuses on e-commerce and Kohl’s focuses on physical shopping. By offering Amazon’s services at Kohl’s physical, the partnership will introduce more customers to both Kohl’s and Amazon to shop at these stores.
Starting from the point of the different segment of customers each one of this companies usually reach to I think that Kohl’s should explore the idea of alliance with both Aldi and Amazon. By doing so it would attack customer who are looking for groceries at very low prices (such as the ones from Aldi), or customers who are looking for high end grocery products (as Whole foods). This would call the attention of a wider group of customers, who would not usually go to Kolh’s store, but having a grocery department, available into the suburban malls would be a plus to obtain more attention and customer coming in. At the same time this would be so beneficial for Amazon, since the are trying to expand their grocery stores chain, not having the necessity to invest in new building construction, and this also will provide Amazon with storage space right next to their online shoppers, given them the option for pick ups at no cost or returns, as they have already started doing it.
Although a Whole Foods 365 and Kohl’s partnership could benefit both companies, I’m not so sure it is a better strategy than partnering with Aldi. The article details a couple benefits to Kohl’s for, but significantly more benefits to Whole Foods. Kohl’s and Amazon (Whole Food’s owners), although different in their brick-and-mortar and e-commerce structure, are competitors. A successful relationship between Kohl’s and Whole Foods might convince Amazon to open brick-and-mortar stores in combination with the grocer and ditch Kohl’s as a partner. Kohl’s must not enter the relationship if this is a possibility. Instead, Aldi is a better partner for Kohl’s if they seek having a grocer in their store, as Aldi is solely a grocer and not a e-commerce retailer. Aldi would be at less risk of replacing Kohl’s in the partnership. If I were Kohl’s, partnering too closely with Amazon would make me nervous. If Kohl’s enables Amazon to have pickup and return locations at Kohl’s stores, the ease of transacting with Amazon allows the e-retailer to gain market share at Kohl’s expense. It is the sort of strategy that could work if executed well, but Aldi sounds like a better choice.
Matt, I like your alternative viewpoint compared to the other responses. I agree. I assume it is not as simple as them making this agreement and their customer base improving. What is Kohl’s getting out of it? Will Aldi and Whole Foods be competing with one another within the same platform (Kohl’s)? I know they typically target different market segments, but 365 Whole Foods is supposed to sell less expensive product similar to Aldi. I also completely agree that although Amazon is an e-commerce platform, they are still the competition. I would like to know more about what Kohl’s is receiving to provide this service.
Should Kohl’s focus on Aldi alone and expand that relationship, or build a more custom store location dependent grocery plan, choosing between Aldi and Whole Foods, based on location ?
It is strategic for Kohl’s to find solution to increase numbers of shoppers in their stores. Indeed ecommerce is taking some market share therefore the store need to reinvent itself. By leasing space in their stores for company like Aldi and Whole Foods, they would catch attract shoppers that want to purchase all of their shopping list from one place instead of going to two or three different store. Kohl’s should focus on who are its customers for each stores and adapt decide if it is a better fit for them to bring Aldi or Whole Foods in the store. Kohl’s should focus on analyzing competitors around each stores and average income in the area before deciding between Aldi and Whole food.
Should these mini Whole Foods locations sell the private label Whole Foods brand along?
Whole Foods is appealing to a particular range of consumer because it sells unique products. Without their own label, shoppers may have struggle to understand why they should pay a premium for products that they could find elsewhere. Therefore, it is very important that Whole Foods sell their private label in those new stores.
How might the ease of transacting with Amazon and the availability of inventory for immediate pickup help expand the Amazon and Kohl’s relationship ?
More people visit the Amazon website that Kohl’s one. People that are not familiar with this store and that prefer to shop online might find very useful for them to find those products listed in the amazon website. For Kohls, even though they probably have to a profit share with Amazon with this deal, they also increase significantly the number of potential new customers.
It is a great strategy to expand the relationship between Amazon and Kohl. Kohl provides the space for the retail products which attract customers through the reputation of whole foods. Also, Amazon could save operation costs and inventory holding costs. While, Kohl should consider their grocery plan and then to decide the location of the store. Since Aldi and Whole foods have different target customers. For example, the whole foods aim to provide organic food for customers which price will be higher and more suitable for the people of high consumption. The location selection for whole foods will be the urban area instead of rural area. However, Aldi provides lower price and standard quality products which fits more areas.
75% or more of Americans who are conscious about food would likely to check the labels and more likely to buy Non GMO or Orgnic food. Americans are becoming more and more aware of what they consume more than ever. Aldi is a discount grocer which offers low-price products, while Whole Food focuses on better quality options and have more Organic produces. Based on these differences, I personally think Kohl’s should build a custom store location dependent grocery plan, choosing between Aldi and Whole Foods, based on location. This strategy has long been applied by traditional grocers like Walmart and Whole Food. This will allow Kohls to attract different customer base into its store and potential a broader customer pool who usually buy produces at Whole Food and never been to Kohls. These mini Whole Foods locations should not only sell the private label Whole Foods brand along, because Whole Food goal is to reach a lower-price customer base, and they have to do it gradually, they should offer a variety of brands; however, prominently advertise and display 365 brands so that customers feel like they are the one who chooses, and they feel more comfortable to shop knowing they have options each time they shop. The ease of transacting with Amazon and the availability of inventory for immediate pickup help expand the Amazon and Kohl’s relationship because it helps Amazon reaches more customers, and it also helps Kohls build its reputation and give its customers more reason to go to the store. Logistically speaking, it also helps minimize Dead-Road Delivering because currently Kohls offers free returns for Amazon products so when Amazon comes to pick up their products, they can come with groceries.
Kohl’s should build a more custom store location dependent grocery plan, choosing between Aldi and Whole food, based on location. Because if Kohl’s has two suppliers, there are more options and less risk for seasonal situation or even pandemic situation like right now. The suppliers can have competition and Kohl’s will get products with better quality, lower prices, or special offer. Whole Foods or Aldi can still sell the private label brand which can be a marketing benefit for them.
Since the retailer market nowadays is getting more competitive and transparent, it is important for companies like Kohl’s to find their own way to maintain and expand the business. By partnering with multiple different entities can enlarge Kohl’s customer base and enrich the income from operation. Open the business to multiple partners can increase the variety of products and services the retailer offers, what they offered can be something that has never been provided, under this condition. Customers from different segments can be attracted, when they are shopping at Kohl’s they can also explore the store more and potentially find what they need in the same time. Also, building a more location dependent grocery plan can further sort the most efficient and popular site. And further development can be arranged in the later stage of business. The biggest advantage for selling the private label are bringing down the cost and increase the brand recognition. Under this way, more income can be generated, and the popularity of the brand can be increased.
Kohl’s should set up a grocery plan that is more dependent on store location, choosing between Aldi and Whole Foods based on location. Because Aldi and Whole Foods appeal to different customers, a location-based grocery plan would be more helpful for Kohl’s to meet the needs of consumers in different regions.
Whether mini Whole Foods locations should sell its own brand at the same time depends on local consumer preferences. As mentioned in the article, the shopping preferences of consumers in different regions can vary greatly. Therefore, local market research and extensive data analysis are indispensable before this decision is made.
Such an alliance would clearly help expand Amazon and Kohl’s relationship. For Kohl’s, the ease of transacting with Amazon and the availability of inventory for immediate pickup also helps increase its passenger flow. People who aren’t Kohl’s customers may also stop by Kohl’s while returning Amazon products or buying Whole Foods products. So it can help Kohl’s attract more customers and increase revenue. For Amazon, Whole Foods doesn’t have to pay for new construction, allowing it to expand its chains at lower costs. Amazon also has more return sites. This is clearly a win-win strategy.
Vying an opportunity to be more customer centric by leveraging their existing space, Kohl’s partnered with Aldi to offer broad competitive products. Kohl’s had physical space and wanted to reduce its footprint while increasing diverse product offerings at cheaper rates. Aldi with its private label only model, proved to be a perfect partner for Kohl’s situation. Thus, with the same space, Kohl’s was able to provide diverse products at cheaper rates thereby achieving growth per unit and hence, should definitely seek to expand this relationship as it attracts Aldi loyal customers who are far away from an Aldi store and provides Aldi with more customer reach. Now, Amazon owned Whole foods is expanding and could leverage “developed spaces” and a vast customer base to expand further and be noticed. Amazon’s dominance in the ecommerce sphere, their great replenishment models and ease of transactions between these two firms (due to existing relationship with Kohl’s for returns), makes a Whole foods-Kohl’s partnership viable when competing against giants like Walmart and Kroger. A decision regarding custom store location based plan can only be made if either the customer base for these brands/products actually varies with location, or the chain structure (location of warehouses) reduces overall supply chain costs due to economies of scale. Returns at Kohl’s for Amazon shows that chain structure and coordination have been established between these two firms. And both their needs in terms of retail space utilization and customer base auger a competitive win-win partnership. Eventually the efficiency of execution and coordination between Kohl’s Aldi and Whole foods together will decide the merit of this move!
The collaboration with Kohl’s can help Aldi attract customers who may not have the opportunity to shop at discount grocery stores. Food retailers will see heavy traffic during mealtimes and after get off work, but the partnership with Cole may help more day and weekend shoppers in the chain who are curious about Aldi’s products.
It is appropriate to add discount supermarket chains like Aldi to the strategic plan, which provides shoppers with a place to buy healthy snacks and meals after shopping at Kohl’s. Overall, Field Agent’s survey shows that Aldi is the best choice for new partners. When a list of other possible partners appears, the most respondents choose Aldi.
So my understanding first, is that Wholefoods, Aldi, and Kohls represent different groups of customers, and these three brands are not always directly competing with each other. For example, people shopping for exotic fruits may also purchase their daily groceries at Aldi, while they purchase their luxury clothing at Kohls. The cooperation between three parties can definitely benefit each other in attracting a different group of customers while avoiding direct competition between brands. With this being said, a flexible location serving different groups of customers based on location specifications would be a better idea. Wholefoods should carry Wholefoods brand for sure – at least for me this premium brand is the only reason I came to Wholefoods and the quality assurance came with this brand is an important revenue driver.
The no-frills European discount grocery chain Aldi with good reach yet limited spread in the U.S., and Kohl’s, an American retail chain of department stores, were never direct competitors and hence, can offer and sustain a somewhat symbiotic relationship, to the benefit of consumers as well. Kohl’s owns well-established stores in prominent locations and its prime struggle is to increase the footprint and array of customers, whereas Aldi primarily seeks physical locations to expand its reach to compete with chains like Kroger. Customers visiting Kohl’s are most likely to visit Aldi as it offers groceries, something which people certainly and always need. And Aldi’s clientele will provide increased traffic to Kohl’s store.
Facilitating free return service for Amazon seems to be already working well and making sense for both parties. Consumers absorb a part of the logistics cost for Amazon when returning products by driving to Kohl’s store. And Kohl’s benefits from the increased footprint in-store as consumers are bound to look here and there in the store while doing their returns. Whole Foods provides an opportunity to expand its partnership in a more strategic way as Kohl’s will get a new segment of consumers and selling Whole Food’s private label will definitely help further as consumers when visiting a physical facility prefer the availability of all options they know that exists for that store. And Whole Foods, just like Aldi, will be bestowed with a well-established physical store for better penetration in the U.S market.
A comprehensive analysis of demographics and consumer psychology should drive Kohl’s decision to designate stores to its partners if, over time, they see fruitful to continue with both the partners simultaneously.
In the current situation, I can see huge synergy benefits when Kohl, Amazon and Aldi tie up. All three of them cater to different customer segments and consumers would see the benefit right through if they can find multiple needs being addressed in a single shot. Own labels will have higher margins and flexibility as we own them. But consumers always like to have a choice. When we go to Walmart which is a giant in this space, we see various different brands along with Great Value products. If I am price sensitive consumer, I would pick up Great value products as they are generally on the lower end of the price range. But I like the fact that I get to choose it. So whole foods should use a similar strategy but make sure that the low price is reaching the consumers. Aldi is a go-to place for many day-to-day consumers. Kohl can definitely benefit from the store locations of Aldi. One important learning from the pandemic is the power of online shopping. Amazon is truly a king in online business and has revolutionized free-delivery with Prime in a way that the business world did not know before. With Amazon’s expertise on its side Kohl as high chances of rocketing its online-sales.
The decision to sell and offer return for Amazon products was majorly based on increasing footfall at the Kohl stores. The coalition with Aldi and Whole Foods can help in achieving this, along with sales of some complimentary products that the retail stores have. Kohls should study the correlation of the products that Whole Foods will offer and their own products for each location, and analyze if onboarding Whole Foods will have any effect on its sales. Since Whole Foods is owned by Amazon and Kohls already has a deal with Amazon, adding Whole Foods to the portfolio might be easier and a combined deal could be negotiated to maximize gains considering both the Amazon owned entities. Essentially, Kohls is leasing out its real estate in a way, and the minimum return rates it should aim at is just the rate it would have earned at through this real estate space.
Kohls should customize its relationship based on the demographics of its customers in each location. Some locations’ customers might be more inclined towards the Aldi type discount grocery while Whole Foods could drive in more customers towards Kohls in other neighborhoods. It would be important to help these grocers develop models that could work in a small space. Aldi likely wouldn’t have any issues since their store model is 16,000. However Whole Food’s store average 43,000 sq ft with their new 365 stores coming in at 30,000 sq ft. Kohls would need to find the balance between introducing groceries to hopefully gain more traffic to the rest of the department store and giving up too much of space to the grocer that there is not much of the department store left. The ease of transacting with Amazon would help Kohls continue to maintain some levels of foot traffic until it figures out a long term plan to give customers more reasons to shop there.
For Kohl’s, opening space in nearly 300 of its stores to provide space for partnerships with other retailers provides an amazing way for them to bring a new range of customers into their stores. While already starting an alliance with Aldi for some space in their stores, it seems like a natural transition for them to enter into the same kind of partnership with Whole Foods and consider products in different locations based on the different demographics of each Kohl’s location that is providing open space for these partnerships. In terms of a partnership with Whole Foods, I do think that they should stick to stocking exclusively the 365 brand in order to stay on brand for the Kohl’s customer.
Kohls should partner with both Whole foods and Aldi. Reason: It will improve the footfall and enhance the visibility of its products as it will be able to take advantage of Aldi’s and whole food’s customers. So, looking only from Kohl’s perspective it’s a win-win situation. Similarly, for Aldi’s and whole foods perspective it will save a lots of infrastructure cost them while providing an already setup customer base. So, the only question is who take the first step into expanding this deal with Kohl’s.
I strongly feel its a win win situation for Kohl as well as companies who are looking to reach out to more customers influenced by discounts like Whole foods (Amazon), who are constantly looking to extend their ranges and reinvent their retail space. As sales in-store decrease, smaller outlets allow retailers to sustain their physical footprint more profitably. Getting shops assists in marketing and alleviating distribution expenses and returns. Meanwhile it will be equally helpful for Kohl’s which also is trying to capture some of those online customers. This is an chance for Amazon too to explore customer acquisition from a set of consumers who aren’t likely to be Prime members in fact Amazon too have huge opportunity to acquire large customer base
I believe since Kohl’s is not doing so great, it is inherently obvious to try to increase market share and increase availability. I think Kohl’s can tie up with Aldi or Whole Foods depending on these companies’ reach and their local market share. Having both at the same location doesnt make sense, but having the best option at a given location is the most appropriate approach. In addition to having a relation with these companies, it also makes sense to increase reach using Amazon. This would bring down the shipping costs for Kohl’s too and Amazon’s supply chain could be leveraged. To avoid JC Penny’s fate Kohl must have these relationships to survive in this pandemic and improve its standing in the USA market
Yes, Kohl’s, on a custom store location dependent grocery plan, should focus on Aldi and Whole Foods based on location, as it is a strategic plan that could bring them profits. By leasing the space in their stores for Aldi and Whole Foods, shoppers have the great advantage of completing all their shopping needs under one store, rather than going to multiple stores. Kohl’s should analyze and collect data on competitors around each stores, the types and kinds of products that sell, and the demand before deciding between Aldi and Whole foods in a certain location. If in a certain location under consideration already has Aldi, it would be wise for Kohl’s to bring Aldi products into their store to sell to allow for the diverse platform.
I believe the mini Whole Foods locations should sell the private label Whole Foods brand along too, because without a private, unique, identifiable label of their own, shoppers may not be convinced to buy products they should pay more for, as the trust won’t be established without a familiar label.
With amazon’s customer base being larger, it is a vital opportunity for Kohl’s to gain many new customers, which will be boosted by the ease of transactions that Amazon is so well known for among customers. Reduced holding costs with same day pickup can really boost Kohl’s image and Amazon’s further as well.
Kohl’s has understood the current market scenario and made the right choice by partnering with Amazon to accept returns. This is a win win deal for both the partners, as Amazon will utilize a more efficient reverse logistics supply chain through Kohl’s stores, and Kohl’s will benefit from the increase in customer footfall thus impacting its revenues per store.
Partnering with Aldi is again a good strategy for Kohl’s to effectively utilize its space and store location to better serve the customers. Customers would see more benefit from visiting a Kohl’s through increase product variety, grocery and Amazon returns, thus, differentiating Kohl’s from its competitors.
I think partnering with Whole Foods is not a good idea as it may affect its current relationship and operations model with Aldi. Since Whole Foods was acquired by Amazon, Kohl’s should reanalyze its relationship with Aldi and make a strategic decision that does not involve too much dependence on one entity
It is a win-win situation for all the involved companies. Amazon can profit from the real estate of Kohl’s and reduce its operation cost, while for Kohl’s it can be a utilization of the space in the stores. Kohl’s has been struggling with to maintain the footfall in the stores and pairing up with Aldi and Amazon can be an option to improve the overall profit gained from the fixed investments and property owned by Kohl. But on the same time, Kohl should take care that it relationship with Aldi is maintained if it pursues to work with Amazon.
With the advent of ecommerce companies, retail stores have taken a huge hit on their revenues. Hence, it is a wise decision to partner with Amazon to accept its return goods. Both the companies will benefit from this cooperation. Amazon can save costs of having warehouse and personnel to accept returns.
Whole foods is a reputed supermarket chain which has its loyal customers. Kohl’s can leverage the customer base to increase its own revenue. In my opinion, Kohl’s should not focus on Aldi alone, but other companies as well based on the location. It is better to partner with several companies first and then later compare the benefits and take a decision. Customers in different geographical areas will have different preferences. So, Kohl’s must think of a custom plan than a generic plan for all stores. Kohl’s has the advantage of having over 1100 retail stores. It has to wisely choose its partners according to store locations.
More diversity would reach to more customers. The store layout can be designed to match the store’s customers since Aldi and Whole Foods have a different target market and customer preferences. Partner with Aldi and Whole Food would help Kohl’s to increase the volume, thus can help to increase the store sales. Meanwhile, Building partnerships with amazon would help to reach similar results.
I think it would be wise for Kohl’s to continue testing its partnership with Aldi before expanding their pilot to Amazon. However, I think based on the pre-existing relationship with Amazon that a Whole Foods partnership may be more advantageous for Kohl’s. This would be particularly true if they incorporate things like Amazon pickup hubs within the Kohl’s store, paired with the Whole Foods 365 label. Since the 365 label is the most price-conscious line of Whole Foods, this would bring the pricing more in line with what Aldi could offer anyways. From my knowledge, Kohl’s are usually in middle-class suburb strip malls, the pricing of 365 would be feasible, while still drawing upon the Amazon relationship. Kohl’s should focus on one solid partnership rather than splitting deals with both Aldi and Amazon.
As a context to this discussion, I assume Kohl’s is already partnering with Amazon, and there’s some reason to believe that some Amazon customer’s are going to visit Kohl’s. Now, for most of the Amazon customers, Whole Foods is expensive compared to Aldi. Unless, you’re a Prime Member, you’re not subjected to discounts that make Whole Foods even comparable to Aldi (https://www.kiplinger.com/slideshow/spending/t050-s001-aldi-vs-whole-foods-after-amazon-cut-produce-price/index.html#:~:text=With%20its%20larger%20footprint%2C%20Whole,prices%20in%20our%20price%20comparisons.). The price of most of the products at Whole Foods is higher than that in Aldi. Only if Kohl’s believes that giving free returns will bring fair amount of Prime customers, it can go for partnering with Whole Food.
Now taking out Amazon out of the equation, an important point I would like to see here is what kind of customers visit Kohl’s. If the customers are price-sensitive, going with Whole Foods doesn’t make much sense. Aldi is far less expensive and would sync with the customer preference in this case. However, if customers aren’t price sensitive, whole foods is a better option. Another argument can be that price sensitive customers may eventually prefer Walmart or Kroger rather than Kohl’s endorsed Aldi. This might be the case since Walmart has much higher number of stores than Kohl’s. If that’s the case Kohl’s can move for Whole Foods.
Now if Kohl’s chooses to utilize its retail space in a more effective and efficient way, selling food products can be a feasible strategy. However, Kohl’s has to select stores in a meticulous way so that the competition from Walmart or Kroger can be mitigated. Even with Aldi or Whole Food, Kohl’s probably can’t match the price level of Walmart.
Kohl’s should focus on developing it’s relationship with both Aldi and Whole Foods. While Whole Foods is a more premium grocer, Aldi is a discount driven grocery chain catering to the masses. Developing and integrating both the grocers will provide Kohl’s with the flexibility to target the demographic of the store’s location. Based on the demographic, Kohl’s can sell Whole Foods’ private brands as well.
While Kohl’s can act as a pick up station for Amazon and a center to return products to be sent back to Amazon’s warehouses. This relationship can actually drive a part of amazon’s customer to Kohl’s. Amazon can hold special incentives and sell exclusive products through Kohl’s. This can be beneficial to both the companies in acquiring a greater customer base.
As this article mentions, Kohl’s cleared the space for more retailers to increase the exposure to more and more customers. Personally, I think it is better not to solely rely on the alliance with Aldi. It is always better to diversify groceries type to attract different customers. Thus, based on location, Kohl should be open to more and more different retailers to gain competitiveness. In addition, these Whole Food stores definitely can use their own brand name to sell, for their relationship to Amazon has already got a reputation. Amazon provide the return and additional customer service could always increase the good reputation of Whole Food. Whatsmore, easy transaction can strengthen the relationship between Kohl and Amazon because it reduces the process of transcation and inventory turnover will increase, and also immediate pickup has the same effect to make Kohl gain more profit.
A partnership in this case between Kohls and Amazon’s Whole Foods Market seems to benefit Amazon more than it is Kohls. Yes, I think foot traffic may increase more at Kohls and there may be some opportunity to bring in new customers, but I think there is a conflict of direct competition here. With Amazon already selling basically all the products Kohl’s is, I would be concerned with what products whole foods would be allowed to sell in the Kohls stores.
One of the biggest issues with Amazon right now is their lack of brick and mortar presence, which is one of the reasons they purchased Whole Foods. An increased brick and mortar presence gives Amazon the ability to improve logistical efficiencies too ,which is why I can see Amazon wanting to take on this partnership.
With regards to Aldi, I think this partnership would be a better fit for Kohls to avoid competition issues with Amazon. I also think since Aldi is focused solely on grocery items it would pose as a better option.
Kohl’s partnership with Amazon has benefitted both organizations. Amazon got safe locations for the lockers and utilize the Kohl’s network while Kohl’s will get additional sales from luring the customers that would visit the lockers for returns or pick up.
Similarly, With Aldi, Kohls will get an increase in sales and a better brand image and Aldi will also gain by having Kohl’s in their stores by utilizing the space and attract more customers and hence more sales.
I believe that Kohl’s should keep building relationships like these and partner with stores that will help increase the brand presence and benefit both the businesses
I think build a more custom store location dependent grocery plan, choosing between Aldi and Whole Foods, based on location will be better than solely depend on the Aldi. The customers’ preference is different in different location, such as citizen in the big city may prefer to try newest and more diverse grocery like Aldi but for those cities with less young people, they will prefer whole food which already have good reputation. The transacting with Amazon will have Kohl‘s return process, Amazon has a world-leading supply chain system, the cooperation with Amazon will give Kohl’s to have a chance to rethink their online and delivery business.
I think that Kohl’s should try to use Aldi’s locations to it’s advantage. It could incorporate Whole Foods into their store where Aldi is near, basing this on location.
Partnering with Amazon can be risky, given the history of Amazon. But it is one of the biggest, if not the biggest, supply chain system in the world. This could give Kohl’s a lot of advantages. Risky move I believe, but as always the bigger the risks the bigger the rewards.
I believe Kohl should lean towards building a more custom plan based on location. As well as the cooperation came out to be, Aldi appeals to a different consumer segment that is different from Kohl’s. If Kohl is not considering merging, then it would be essential to build their own plan.
Limited by capacity and workforce, it would not be a good idea to include private label products to be sold on the shelves. As the idea of mini wholefood locations is to provide convenient and large demand items, and supporting private brand items aren’t suitable for the cause.
The ease of transaction with Amazon enables Kohl to better communicate and manage financial flows. The importance of fluent cash flow is never undervalued in the industry. The availability of inventory give Amazon confidence to connect consumers to Kohl.
I think this is a classic attempt of consolidation from the retail companies. In locations where the ticket size is less, operating costs spent are irrational compared to the revenue generated and hence this solution is apt. It reduces operating costs for both partners, consolidates customer presence in a single location and will increase spending by customers. Choosing between Aldi and Whole Foods needs to be location based, since customer segment, need for discounting and need of product will be different for different locations.
The decision to sell private label brands should depend on average sales price, volumes for each category. From a brand presence perspective, having private label brands is always a positive for margins.
The presence of inventory and ease of transaction will only motivate customers to buy and hence will be a positive impact on the customer experience and for the partnership
The partnership between Kohl’s and Whole foods would definitely be a successful one, as a lot of the Amazon Customer base would be driven to Kohl’s. Since Kohl’s has a history of owning many private label brands of its own (Apt. 9, Croft & Barrow, Vera Vera Wang etc) this should be an advantageous proposition for Amazon. (Like we have recently seen, the Amazon Kohl’s partnership for returning items has been a very successful one) This usage of Kohl’s retail space will help Amazon and the Whole-foods business with developing a greater footprint, especially in a trusted retail store like Kohl’s.
Also, ALDI caters to a different segment of customers who are looking for greater (Bulk) discounts which are not as widely offered by Kohl’s. So the Amazon and Kohl’s customer base would be closer as compared to ALDI’s.
It is a great strategy to expand the relationship between Amazon and Kohl. For Amazon, by using and storing the Kohl’s warehousing, it can save a lot of operation costs. For Kohl’s, the brand reputation of Whole Foods may help it to increase revenue by attracting customers. As a result, I don’t think Kohl’s should only focus on Aldi alone. Instead, the company should consider working with Aldi and Whole Foods based on location.
To diversify their business and increase a stronghold with the customers, Kohl’s should not focus solely on Aldi, but also continue its partnership with the other brands. Kohls can set up Aldi and Wholefoods in different store branches in areas depending on the customer market. (Since Wholefoods is relatively expensive, and Aldi is more cost-efficient, market research based on the type of customers living in that area and their lifestyle preferences may be taken into consideration). Just like Amazon devices, Kohl’s can also sell the private label of Wholefoods along with other brands. Customers tend to visit places that are more convenient to travel to, hence keeping in mind the optimal range of products, a Kohls can choose to carry both the types of wholefoods products, to provide an experience similar to wholefoods to the customers.
As mentioned in some other comments, I believe it’s important for Kohl’s to identify the segment of customers it wants to cater based on the geographic location. Having strategic partnerships with Aldi, Whole Foods both can prove to be profitable if it places value on recognizing the demand of that region and the demographics of customer base there for in-person sale. So, for example opening an Aldi store near a place/mall which already has a payless or that kind of chain won’t give much value. However, for expanding its online presence and gaining customer base, both these partnerships can prove successful in the long run
This partnerships looks profitable and worth buying into. It would also benefit the companies in their financing and accounting. Although, I don’t believe that it’s an alternative to the existing super markets like Walmart. Super stores like Walmart already sell products similar to Kohl’s and Whole foods combined. I believe that it would be helpful for companies like Aldi and Whole Foods to expand their customer base. But for Kohl they would be compromising their inventory to incorporate the new products. Secondly the partner companies won’t be holding their entire spread of inventory thus the goodwill costs might rise. I believe that Amazon partnership would be beneficial in terms of being a one stop solution for returns.
I think Kohl’s should bring out its strengths and make up its weaknesses. As long as it is a win-win situation, Kohl’s can coordinate with both companies per different locations. Because the customer group and preferences are so different when considering multiple factors such as income level, education, the population proportion and so on. For grocery items, purchases impacted by retail promotions, varies with customer segment mix, features, displays but not that much by brand. Transactions with Amazon and the availability of inventory for immediate pickup do help in online business and instore business. Amazon’s huge customer base are super attracting for all stores. At the same time, provide more choices for those customers are also benefits for Amazon platform.
Kohl’s can also be signed warehouse with Amazon to making extra profits in warehousing business.
I think Kohl’s should keep expanding the relation with retailers since it will add onto new avenues to generate revenues for the company. As compared to Aldi, I feel partnership with Amazon would be much profitable. Typically during peak season (Amazon Prime Day etc) Kohl’s can cater to new customers and inturn increase its on revenues. Customer like to frequently visit retail stores if they find variety hence Kohl’s should expand its network with Whole-Foods.