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Out: Ruthlessness In: Co-opertition

I wrote this piece in late October when I was doing my best attempt at a middle-aged Marigold Hotel experience with my husband (sans kids) in India for two weeks.

What did we do before the internet? I woke one morning and was excited to hear 10 Kohl's stores in the Los Angeles and Chicago markets will both sell Amazon's smart home products and accept the online retailer's returns. The arrangement will no doubt draw more shoppers to Kohl's stores, and make it easier for Amazon's customers to bring back unwanted items.

Store-in-store drawcard for Kohl’s department stores

So why would Kohl’s make this deal with the devil?

  • BORIS (buy online return in store) is quickly becoming a shopper preference

  • In the last 12 months, as many as 70% of US consumers used BORIS according to JDA’s August Customer Survey

  • And they prefer it, citing reasons such as reduced hassle of returning, to faster refunds and the wish to speak with an in-store customer associate because of poor remote customer service.

  • With Amazon a leader in online retail sales, and given that roughly one third of all online orders are ultimately returned, this will be a massive boost to in-store traffic for Kohl’s.

  • And Amazon……. gets a larger physical footprint

Co-opertition brings a win/win for both players. It requires a different mindset.

Bottom-line, the Amazon/Kohl’s partnership is proving a commitment to making shopping easier and more frictionless. These moves improve customer experiences and their bottom line, simultaneously. Win/Win

Co-opertition – what is it?

I often talk of co-opertition and this is an excellent example of co-opertition.

Co-opertition is founded on the concept and a philosophy that teams can and should help and cooperate with each other even as they compete. Co-opertition involves learning from teammates. It is teaching teammates.

Kohl’s / Amazon partnership is an example of two companies that can leverage each other's strengths – Kohl’s using their store base which is a competitive advantage rather than continuing down the slippery slope of other department stores.

The kiosks are run entirely by Amazon, selling products, such as the Echo or the Kindle. But for the returns process, Kohl's own team members do the work. This is a clever strategy.

What can we learn from this and apply in our own market?

A more accommodating approach needs to be taken vs. the old retailer ruthlessness.

Imagine being allowed to interrogate the ecommerce and fulfillment capability of a business you have always admired. Or being able to work alongside a competitor on consolidating a buying order? Perhaps, learning about labour optimisation tools from a retailer who is twice the size as you?

This is the wonderful world of “co-opertition” where businesses of all shapes and sizes are working together, making them become stronger in the process.

This is way beyond ideas such as joint promotions; it’s a powerful way of developing competitive differentiation. The concept originally developed in the tech sector and has exploded as more entrepreneurial thinkers embraced sharing ideas and tools. There are many benefits ranging from finding ways to scale efficiently, identifying new market opportunities and amplifying thinking.

Obviously, there are risks so you need to have a clear set of principles that identify progress, success or a need to part ways. I have brokered several of these styles of relationships and have seen the ingredients for success.

Where I have helped broker co-operative relationships in the retail sector, there seems to be some key ingredients for success:

  • Mutual values: real respect for each other and you should “like” each other

  • Saying things “out-loud”: Open, robust, honest communication and “saying things out loud”

  • Working together: Picking up the phone and meeting face to face, sharing the workload and being clear about the expectations, deliverables and timeframes – most importantly sharing the costs but perhaps “paying it forward” if you are bigger than your partner

  • Win/Win: Working to ensure your partner gets a win and making compromise

  • Acknowledging progress: Regular reviews on progress and celebrating the wins as well as understanding the losses (but not dwelling on them)

  • Start by dating first: find a small area of opportunity where you can work out if you can “adjust” so you can co-exist together

  • Agile: Being responsive, having focus and recognising that this only works if both parties see this as a priority, make time for it to work and can move swiftly if the roadmap needs to change.

Like any relationship, this takes time and energy to develop and grow. Something to contemplate over the festive break.

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