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Cramer: These retailers are making changes to avoid being Amazon roadkill

Key Points
  • "Mad Money" host Jim Cramer uses the Kohl's-Amazon deal to highlight an important trend sweeping the retail sector.
  • Retailers are scrambling to find ways to get out from under Amazon's shadow, Cramer says.
Retailers taking steps to avoid being Amazon roadkill

In the dog-eat-dog world that is the retail sector, CNBC's Jim Cramer says there's only one ground rule.

"Don't just stand there. Do something before the grim reaper comes to get you," the "Mad Money " host said. "That's how I feel about this amazing Kohl's-Amazon deal that allows you to return merchandise that you bought at Amazon to a Kohl's, which will box it and send it back to the online behemoth for free. "

Cramer has always liked Kohl's thanks to its reliability, conservative attitude and strategic locations. Strip malls are ideal for returning purchased items, he said. And because the Amazon deal will only go into effect at 82 Kohl's stores in Chicago and Los Angeles, Cramer figured the inevitable expansion to the East Coast would be welcome.

The "Mad Money" host even recommended that investors consider buying the stock now given its 5 percent dividend yield, the promise of the deal and the retailer's strong balance sheet.

But Kohl's isn't the only company taking steps to avoid being crushed by Amazon. Cramer noticed Macy's introducing new fashions and upgrading its stores to avoid falling behind, an initiative he called "a work in progress."

Children's Place has also managed to stave off competition from Amazon. Cramer credited CEO Jane Elfers for recognizing that offering more sizes meant more business given how quickly children grow and how much easier it is for them to try clothes on rather than order them online.

Cramer also didn't want to write off Burlington, Ross Stores and TJX Companies, three discount retailers that have the capacity to sell goods at lower prices than they go for on Amazon.

The "Mad Money" host had a harder time defending food and drug retailers like Walgreens or CVS, however. He said Amazon's tie-up with Whole Foods positioned the e-commerce giant to "crush" the food industry.

Cramer also argued that Amazon could easily go into the prescription drug business, which is why he gave up on the stock of Walgreens for his charitable trust.

"Don't rule out the newfound alliances with Amazon or the more aggressive style of those we think are being left behind, including, by the way, Wal-Mart with its fast-growing business, " Cramer said. "It's not over until the fat lady sings. Right now, I'm not hearing anything from her yet, that is, if there's ever going to be a song at all."

WATCH: Cramer tracks retailers bucking Amazon

Cramer: These retailers are taking steps to avoid being Amazon roadkill

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