Retailers are scrambling to find ways to get out from under Amazon's shadow, CNBC’s Jim Cramer says.
"Don't just stand there. Do something before the grim reaper comes to get you," the "Mad Money" host said on CNBC.
"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 said.
Kohl's Corp. said Tuesday it will pack and ship eligible Amazon return items for free at the 82 stores offering the service, the Associated Press reported.
There will be designated parking spots near the Kohl's store entrances for those doing Amazon returns. While the service will allow Kohl's customers to skip their local post office for Amazon returns, it also gets them into Kohl's stores — where they might then shop.
Cramer recommended that investors consider buying Kohl’s stock now given its 5 percent dividend yield, the promise of the deal and the retailer's strong balance sheet.
Cramer also highlighted other retailers apparently on the move to extend their life expectancy amid Amazon’s dominance.
He noted Macy's introducing new fashions and upgrading its stores to avoid falling behind, an initiative he called "a work in progress."
Cramer credited Children's Place 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.
Cramer said retailers that find it harder to co-exist with Amazon will have to start thinking outside traditional boundaries.
"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 Jet.com 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."
To be sure, department stores have struggled as more people shop online or at discount stores. But despite the growth of online shopping, most retail transactions still take place in physical stores.
Analysts have said that being partners with Amazon will give Kohl's a way to differentiate itself from other department stores and lure in shoppers looking to buy electronics. For Amazon, it gets its devices in front of more people to try them.
Earlier this year, the owner of Sears and Kmart said it would sell its Kenmore-branded appliances on Amazon.com for the first time.
Meanwhile, the bankruptcies of nearly three dozen retailers since the beginning of the year — many of them very small companies, but also well-known names like Payless Shoe Source, Gymboree Corp. and True Religion jeans — has resulted in job losses and store closings, the Associated Press explained.
Credit Suisse believes that there could be 8,640 store closings this year, which would surpass the 2008 peak of 6,200. In 2008, the number of bankruptcies was at a historic high of 569, according to S&P Global Market Intelligence.
Amazon, meanwhile, has been using its $99-a year-Prime Membership as a way to gain fierce shopper loyalty as it adds more perks like same-day delivery Amazon Now for a growing number of markets. It's also making partnerships with brands like Sears and Kohl's, and now has hundreds of Whole Foods stores that it could use as distribution points, the Associated Press explained.
"Amazon has the level of convenience that so far surpasses the ability of traditional retailers can offer," said Karl Havard, a retail industry expert for PA Consulting Group, a global retail consultancy. "There's a lot of inertia in the retail boardroom. They're not prepared to take the risk."
(Newsmax wires services contributed to this report).
© 2024 Newsmax Finance. All rights reserved.