Amazon's New Wardrobe Service Is Latest Threat for Apparel Stores
June 20 2017 - 1:35PM
Dow Jones News
By Khadeeja Safdar, Suzanne Kapner and Laura Stevens
Amazon.com Inc. is giving shoppers another reason not to visit
stores. The online giant is rolling out a free service to let its
Prime members try on clothes at home, its latest attempt to crack
into the fashion world.
The new service, dubbed Prime Wardrobe, is a threat to
traditional sellers of apparel, especially department stores, that
are struggling to get shoppers to visit stores. It also challenges
online players, such as Nordstrom Inc.'s Trunk Club and startups
like Stitch Fix, which ship boxes of clothes for people to try on
at home. Shares of several retailers, including Nordstrom and Gap
Inc., fell about 3% Tuesday afternoon.
The service announced Tuesday would allow Amazon Prime members
to fill a box with three or more eligible apparel items from its
website, try them on at home for seven days and ship back what they
don't want free. Customers aren't charged for the purchase during
the trial period and they are offered a discount of up to 20% on
what they keep.
"The reason this program is such a wake-up call for traditional
retailers is the fitting room was the one place where an offline
retailer could differentiate itself from an online pure play," said
Joel Bines, the co-head of AlixPartners LLP's retail practice. "A
good sales associate [in a store] can make all the difference."
Apparel is a notoriously difficult and costly segment for online
retailers, where return rates can approach 40% for some items.
Amazon, which already sells apparel from several department-store
brands, is now the second-largest apparel seller behind Wal-Mart
Stores Inc. after taking market share from Target Corp. and several
department stores, according to a research note published by Morgan
Stanley in April.
Write to Khadeeja Safdar at khadeeja.safdar@wsj.com, Suzanne
Kapner at Suzanne.Kapner@wsj.com and Laura Stevens at
laura.stevens@wsj.com
(END) Dow Jones Newswires
June 20, 2017 13:20 ET (17:20 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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