What Kohl’s Recent Partnerships With Planet Fitness and Amazon Reveal About the Future of Retail

Uncommon retail partnerships have been dominating the trade news recently. In March, Kohl's announced a partnership with Planet Fitness. In April, the department store chain announced the expansion of its Amazon.com return program to all of its store locations. There have been other partnerships as well, such as the Kroger pickup option inside Walgreens’ stores, Capital One’s partnership with Peets Coffee, and Harry’s deal with Target to sell its razors in the retailer's stores.

What all these concepts reveal is continued emphasis on the new principles of retail: agility and speed, alongside context. Modern retailers recognize the physical retail environment needs to find its place and reason for being in a changing landscape of consumer needs and a myriad of new ways to shop. In the last few years, dismal numbers from traditional retail outlets have emerged and the trend continues. There has been plenty of speculation about the so-called “retail apocalypse,” however, many modern, forward-thinking retailers are beginning to challenge this way of doing business.

“We actually believe that the truth is must less dramatic,” says Tal Zvi Nathanel, CEO of Showfields in New York City. “This is not an apocalypse, the moving together of two continents (e-commerce and retail) towards each. In a few years they will become one land — [a] land that's ruled by the customer. It’s as simple as that."

Kohl's latest moves reflect this sentiment as it merges rather than resists all the things consumers want and can do online, such as discover, plan, shop, and those they do sometimes more easily offline, such as work out; make exchanges and returns; and see, touch and feel items. This breaks down the barriers between these two modes of shopping, allowing each to support the other. They also merge moments — moments of inspiration (physical retail as a showroom); moments of self-care, improvement and wellness (Planet Fitness); moments of transaction (simple purchases); and moments of convenience (returning online purchases in-store).

This thinking requires brands to operate in a new way as well, with a focus on being flexible and occasion-based, appealing to consumers on human terms. Brands must learn to adapt so they can seize new opportunities to connect with customers, relinquishing their need to stay in control and work in a linear fashion. Brands that adopt a more dynamic way of working that allows them to adapt to new opportunities and contexts as they arise will see results in their bottom line.

Sometimes this might entail taking multiple bets at the same time. L’Oréal USA provides a strong example of a larger, traditional “big brand” recognizing the need to be flexible and adapt to customer preferences with its launch of Color&Co, a direct-to-consumer (D-to-C) hair color line. Following the success of D-to-C and digital-native brands Harry’s and Glossier, L’Oréal put great at-home hair color in the hands of consumers. Its new offering includes a free video consultation with a certified colorist or an online quiz to ensure customers select the right shade, adding value a retail associate cannot provide.

Brands thinking about leveraging new retail partnerships should keep the following considerations in mind. Above all, creating more than one channel through a partnership is not an either/or play. Brands must look at all of their channels and partnerships as an ecosystem with connected key performance indicators (KPIs).

• Brands can use data from retailers to improve digital customer experiences, customize products and personalize offers, as well as use data from digital experiences to improve offline experiences and offers.
• Partnerships can be used to attract new customers and evolve the brand itself.

Many brands launch new partnerships and routes to market (RTM), but fail because they neglect to think of the network effect of using the advantages and intelligence of each RTM to inform the overall business. Look at each partnership or RTM as a node of the business with unique KPIs and “system” KPIs.

Molly Schonthal is the vice president of strategy and innovation at Salsify, a product experience management platform.