February 17, 2020

Kohl's ... Weak File Power

Industry pundits lauded Kohl's for accepting returns from Amazon.

From a data standpoint, it's fun to collect data on a competitor. When your customer enters your store, you record the fact that the customer is returning something from a competitor. This causes the customer to be "different" ... the customer moves into a very different segment in your File Power structure.

But it doesn't mean that the customer is more valuable. 

It does mean that the customer will behave differently in the future.

The theory is that you get the customer into the store for an incremental visit, and that incremental visit results in an incremental purchase.

The reality is that you are processing a return. The reality is that the visit and any potential purchases are not 100% incremental. They might only be 20% incremental. That's good for the p&l, but it is a classic case of adding a weak amount of File Power to your business. 

We're in an odd state right now ... e-commerce is fully mature ... mobile is essentially mature ... and File Power is hard to come by. It's like the early 90s all over again. 25-30 years ago, pre-internet, merchandise was critically important. We're headed in that direction once again.

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