Amazon announces Prime Wardrobe, tackling fashion retail head on – CNBC

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First it was food, now it’s fashion.

Just days after disrupting the grocery industry, Amazon has announced plans to grow and evolve its fashion retail division online, launching a new Prime membership benefit.

The e-commerce conglomerate’s clothing department, Amazon Fashion, said Tuesday it will begin rolling out Prime Wardrobe.

The wardrobe subscription service is still being tested in beta, Amazon said, but shoppers can sign up to be notified about the program’s launch in certain markets.

Amazon’s new fashion platform looks similar to other wardrobe subscription services like Stitch Fix and Trunk Club. According to Amazon’s website, Prime Wardrobe includes brands outside of Amazon’s private labels, for example, Adidas, Calvin Klein, Levi’s and Hugo Boss.

“Prime Wardrobe is a new service that brings the fitting room to you, so you can try the latest styles and find your perfect fit before you buy,” Amazon said.

Prime Wardrobe will soon be included with all Prime memberships, the company added. The service allows customers to order items like shoes, clothes or accessories at no upfront charge, only paying for what they decide to keep. Shoppers have seven days to decide what they don’t want.

Prime Wardrobe shipments will come in a resealable box with a prepaid label, Amazon said, to make the return process less of a hassle for shoppers.

Additionally, with every Prime Wardrobe order, should a customer keep five or more items, he or she will receive 20 percent off those items, Amazon said. Keeping three or four fashion items merits a 10 percent discount on the website.

Amazon Prime Wardrobe on a smartphone.

Amazon remains far behind department stores like Nordstrom and Macy’s in the fashion business, but it’s been gaining share rapidly as many rival retailers struggle to expand apparel sales.

This new service could put additional pressure on the department stores, especially if Amazon is selling labels that they usually carry. The “try before you buy” concept has been particularly appealing to moms and busier millennial customers.

“Amazon’s taking a page from players such as Stitch Fix, which has been gaining steam and grew revenues to $730 million last year by letting users try on looks at home,” Evercore ISI analyst Omar Saad wrote in an email to clients Tuesday.

“While Stitch Fix uses a combination of artificial intelligence and full-time stylists to recommend looks tailored for each user, Amazon brings to the table its massive scale, logistics expertise, aggressive stance and nearly endless supply of funds.”

If Prime Wardrobe takes off, retailers could be left scrambling, Saad added.

“Already, stores of all stripes are struggling mightily to figure out the right combination of online and store to serve the needs of shoppers,” he said. “Amazon is not afraid to experiment and has been working hard to find the right fit in fashion.”

Amazon said Prime Wardrobe will feature more than 1 million fashion items.

— CNBC’s Deirdre Bosa contributed to this reporting.

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