Amazon is a lot of things to a lot of people, but one thing that it has never been able to claim is status as an environmentally friendly retailer. With its vast shipping and logistics services, Amazon accounts for substantial oil and gas usage, potential pollution, and expansive packaging. It cannot stop shipping—that’s a primary basis for its competitive advantage—but it is determined to find some creative ways to lower its environmental impacts.
One of these options pertains to returns. In the past, when consumers needed to return various products, they usually would ship the items back to the retailer. For some products, the returns were free; others required consumers to pay the return shipping charges. But regardless of whether buyers paid to make the returns or not, each return shipment required the use of additional resources and logistics tools.
Instead, Amazon is now encouraging buyers to return their unwanted goods to brick-and-mortar stores in their local area, which Amazon has partnered with to support this reverse logistics supply chain. In particular, in a novel partnership, Kohl’s retail stores accept Amazon returns of a wide range of products, whether clothing and accessories, similar to what Kohl’s sells, or pet supplies and electronics, which might not be in stock anywhere on its shelves.
For Amazon, as noted, the effort enables it to claim greater environmental responsibility. It also increases consumer convenience. This channel accepts more free returns, so consumers do not wind up paying for ordering the wrong thing. In addition, for some people, stopping by a local Kohl’s is a lot easier and quicker than having to package the items up again and get to the post office to ship them. Furthermore, in this agreement, the returned products do not have to be packed into a box, so consumers can just bring the unwrapped items with them, without having to struggle with bulky packaging or worrying about finding a new box if the one in which they received the product was damaged somehow.
For Kohl’s, the partnership initiative certainly creates more work, such that stores have to have personnel on hand to accept the returns, as well as space to store them until Amazon can come retrieve the items. But it also creates more opportunities for sales. Some data indicate that in areas where Kohl’s accepts Amazon returns, store traffic increases. Much of that increase also appears to be due to new consumers, who might not have visited or shopped frequently at Kohl’s before. The marketing research—while offering the careful warning that the data appear potentially correlated, not causal—also suggests that sales in these stores increased after the partnership with Amazon came into action, more so than in stores without this return service option.
Discussion Questions:
- What is Amazon’s new return policy?
- Why is it implementing this new policy, and what other factors might have influenced its decision?
- Does this new policy improve or hinder customer service?’
- How has Amazon’s return policy affected Kohl’s?
Source: Tatiana Walk-Morris, “Amazon Expands Its Free Return Policy,” Retail Dive, December 19, 2019. See also Daphne Howland, “Amazon Partnership Delivering Returns for Kohl’s,” Retail Dive, April 4, 2019; Nick Statt, “Amazon Expands Free Return Policy to ‘Millions of Items’, The Verge, December 18, 2019