Kohl's CEO says 'big idea' behind Amazon partnership is driving traffic

  • "Mad Money" host Jim Cramer sits down with Kevin Mansell, the outgoing chairman, president and CEO of Kohl's, to discuss the retailer's partnership with Amazon and the latest quarter.
  • Mansell says that while Kohl's is still in the early stages of its Amazon pilot program, he is already noticing benefits.

Kohl's budding partnership with Amazon marks the next leg of innovation for the department store operator, Kohl's Chairman, President and CEO Kevin Mansell told CNBC on Tuesday.

With another earnings beat under its belt, the Wisconsin-based retailer has turned its focus to bolstering its pilot program to sell Amazon products and accept Amazon returns in its stores.

In an interview with "Mad Money" host Jim Cramer, Mansell said that allowing shoppers to return items purchased on Amazon at Kohl's stores "in a seamless way ... and then converting that traffic to Kohl's shoppers and purchases is a big idea."

The partnership with Amazon, which began in 2017, presents an opportunity for Kohl's to boost foot traffic at its 81 participating locations in Chicago and Los Angeles, Mansell said.

"We're a few months into it, but we know one thing for sure: the experience is amazing and people are using the service," the CEO said, noting that driving traffic has been Kohl's No. 1 priority for the last two years.

"If the customer responds, they think it's a great experience, they use the service, but very importantly, it drives incremental traffic, then we're going to look to expand it," he said.

But Mansell admitted that Kohl's results were only half of the equation. Amazon is also tracking how the Kohl's partnership affects its own business, he said.

And if Kohl's were to ever consider expanding the Amazon capabilities to its 1,000-plus stores, the partnership would have to be mutually beneficial, he added.

"It has to work for them as well," Mansell told Cramer. "I'm sure they have their own criteria that they're looking at to see whether or not it's a success. But I think the core idea, which is to come up with innovative ways to drive more people into our stores, that's the big idea."

Mansell also acknowledged that Amazon products and returns are far from the only things driving traffic into Kohl's stores.

With the windfall from the tax overhaul, Kohl's has started investing more in its omni-channel strategy and testing "flexible formats" at its locations by filling vacant real estate with grocery or convenience stores, the CEO said.

The company has also been able to stave off closing stores like many of its competitors because its stores are located outside of the mall.

On the consumer side, Kohl's has also seen increased interest in its health and wellness offerings, including but not limited to activewear brands Nike, Adidas and Under Armour.

"Health and wellness is big throughout the store," Mansell said. "We know that that's how America wants to live in the future, and if we can become the destination for active and wellness, we think we've got a long-term strategy."

Watch Kevin Mansell's full interview here:

Disclosure: Cramer's charitable trust owns shares of Amazon.

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