Should Kohl’s sell Whole Foods products in it’s stores?

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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43 Responses to Should Kohl’s sell Whole Foods products in it’s stores?

  1. Apurva Hardikbhai Desai says:

    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.

  2. Ke Wan says:

    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.

  3. Pauleth Charris says:

    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.

  4. Mengying Song says:

    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.

  5. Ryan Ma says:

    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.

  6. Li Yize says:

    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.

  7. Archit Bimal Shah says:

    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.

  8. Dan Sun says:

    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.

  9. haocai1227 says:

    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.

  10. Hsing Chiao says:

    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.

  11. HANOOSHA NAGIREDDY says:

    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.

  12. Aloma Aurelia DSouza says:

    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.

  13. Krishnajit Bhattacharyya says:

    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.

  14. Jilan Liu says:

    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.

  15. Sumit Singh says:

    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

  16. Abhilasha Satpathy says:

    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.

  17. Hee-kyoung Han says:

    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.

  18. Yu-Ting Hung says:

    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.

  19. Longyu Guan says:

    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.

  20. Abhishek Chokshi says:

    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.

  21. Shane Bryant says:

    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.

  22. Vrinda Vishal Chopra says:

    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.

  23. Xuan Dong says:

    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.

  24. RUI LUO says:

    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.

  25. Ravleen Kaur says:

    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.

  26. Gokul Siddharthan J says:

    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.

  27. Akshara Anand says:

    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.

  28. 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.

  29. Aditya Vats says:

    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

  30. Li-Ren Syu says:

    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.

  31. Li Zhao says:

    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.

  32. Deboleena Sen says:

    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.

  33. Keqian Hou says:

    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.

  34. Debashis Tarafder says:

    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.

  35. Shekar Sankar Raman says:

    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

  36. Gautam Venugopal says:

    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.

  37. Pardha Sai Vangavolu says:

    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

  38. 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.

  39. Srijan Saurabh says:

    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

  40. Sounak says:

    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.

  41. Sanjula Sinha says:

    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.

  42. Kartik Misra says:

    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.

  43. Siddharth Sourabh says:

    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.

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