How Amazon Hubs Can Help Revive Stein Mart’s Business

In a bid to increase foot traffic and prop up faltering sales, discount retailer Stein Mart is bringing Amazon Hub lockers to more than 200 of its stores.

Rather than having their Amazon orders shipped to a home or business address, customers can have them sent to the lockers for free. They can also select the kiosks as return centers when initiating the process online and drop off their unwanted goods in store.

Stein Mart is facing the same challenges as many of its department store contemporaries, and this past year was no exception. Sales from the first few months of 2019 fell 3.5% over the year prior, and dipped 1% overall in 2018.

In January 2018, Stein Mart CEO Hunt Hawkins said in a statement that the franchise was willing to “explore all opportunities” to improve sales and that it was seeking to “identify potential strategic alternatives” to its current business model.

That strategic alternative has materialized in the form of a deal with an online behemoth that’s likely partially responsible for the 117-year-old department store’s downturn.

Stein Mart is likely looking to successful Amazon partnerships with brick-and-mortar chains like Kohl’s for inspiration. The two companies entered into business in late 2017 with a program that allowed customers to return their Amazon goods to Kohl’s stores. The arrangement began with 82 stores but has now grown to include all of Kohl’s 1,150-plus locations across 48 states.

As the struggling chain had hoped, providing a convenient drop off point for Amazon shoppers drew them into Kohl’s stores to browse and buy. By early 2018, just a few months after the partnership was finalized in the Chicago region, Kohl’s revenue growth in the area was up 10%, compared with 5% growth across the rest of the country.

“We are thrilled to offer this innovative delivery experience to Amazon customers while introducing new shoppers to Stein Mart,” Hawkins said. “Customer service and convenience are top priorities at Stein Mart, and the ability to give both to Amazon customers was a big factor in our decision to introduce this program.”

Editor’s Note: This story was reported by FN’s sister magazine Sourcing Journal. For more, visit Sourcingjournal.com.

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