What happened

Shares of Kohl's Corporation (KSS -0.47%) have jumped Wednesday, up by 5% as of 12:20 p.m. EDT, after the company announced a retail partnership with Amazon.com (AMZN 0.83%) to sell smart home products.

So what

The Amazon stores-within-a-store will focus on Amazon's line up of smart home products like the Echo and Echo Dot, but will also offer products like Fire TV and Fire tablets. The partnership will include 10 select Kohl's stores in the Los Angeles and Chicago areas starting next month.

The front of a Kohl's store.

Image source: Kohl's.

The dedicated Amazon spaces will be approximately 1,000 square feet and allow customers to experience the products firsthand as opposed to just purchasing online through Amazon's website. Customers will also have access to Amazon Home Services, which connects consumers to local services and businesses.

Now what

"We believe in the power of our store portfolio and know that our future as a best-in-class omnichannel retailer will be driven by how inventive, compelling and unique we can make our store experience," said Michelle Gass, Kohl's chief merchandising and customer officer, in a statement. "Kohl's and Amazon share a customer obsession and we've joined together to leverage each other's strengths and deliver a great experience customers can only find at Kohl's."

The partnership is the latest in Amazon's growing presence in physical retail, as it continues to expand beyond its core e-commerce business. Many retailers fear competing with Amazon, so partnering with the company will give Kohl's investors reason to be optimistic.