Amazon is radically changing how we shop for clothing – Business Insider
This week Amazon took a major step toward becoming a bigger
presence in your wardrobe, and we’re only just beginning to
understand what the ramifications for the retail industry at
large will be.
The new Prime
Wardrobe program, which lets Amazon Prime customers try on
clothing at home over a period of seven days for free before
purchasing, is similar to many “box” services like StitchFix and
The key difference with Amazon’s service is that customers choose
what they put in their boxes — from three to 15 items —
instead of stylists or algorithms. Customers can also
order a box as often as they wish, and there’s no monthly
subscription like other box services.
‘Another nail in the coffin’
The Wardrobe service is “another nail into the department
store coffin,” Wells Fargo analyst Ike Boruchow wrote in a note
Industry stalwarts like Macy’s, Sears, and JCPenney have already
struggled to adapt to growing competition from e-commerce and
waning mall traffic, and this new initiative might just push
them over the edge.
“Simply put, it’s a negative,” for department stores, the Wells
Fargo analysts wrote in the note.
Return to sender
Prime Wardrobe eliminates a
key sticking point shoppers have when buying clothes online.
Nearly half — 48% — of customers surveyed by retail data firm
Nazar say they returned an online purchase in the last
Unlike most clothing stores, Amazon has a key disadvantage in
that there are no physical locations to return clothing items
easily. Returning items to Amazon often involves printing a
label, finding a box, and making a trip to a post office.
For Amazon specifically, 74% of Amazon customers complained
about printing a return label and 25% said it was annoying they
had to find a new box or envelope, according to Nazar.
Clothing sold by Amazon already comes with free shipping both
ways. Prime Wardrobe goes even further by shipping in a
reusable box with its own return label that UPS pick up on front
porch and return to Amazon.
This creates peace of mind for consumers and
eliminates the hesitation to click “order” that will
no-doubt get more items in customer’s hands with the appropriate
incentives to keep them.
Amazon’s plethora of choice beats any department store.
Its catalog of fashion items dwarfs most competitors, as
more and more brands — even fashion and designer — ignore the
stigma and sell directly through Amazon.
Amazon may begin selling Nike directly through its website
through a deal with the sports apparel maker, a Goldman Sachs
wrote this week. Nike was one of the notable wholesale
holdouts still not selling directly on Amazon, but even the
largest sportswear maker in the world can’t deny the allure of
Amazon’s younger, affluent customers.
The creation of Prime Wardrobe makes it more likely other brands
will jump on Amazon to sell through the website. Prime Wardrobe
creates another channel for companies creating sought-after
products, looking to grow faster, like Nike, according to Wells
Fargo. Nike selling on Amazon is expected to increase the
company’s global sales by 1%.
Amazon has a greater selection of apparel than any one department
store. As it offers up more of the brands consumers want —
including luxury and designer — customers may find the
convenience makes it difficult to shop anywhere else. Over 1
million items will be eligible for the Prime Wardrobe.
Amazon is also heavily investing in its
private label offerings, which is sold exclusively to Prime
subscribers. If Amazon is successful with its own label
clothing, it could be “disruptive to the whole industry,”
according to one retail analyst.
A bigger piece of the pie
Amazon is expected to pass Macy’s as the US’s largest apparel
seller this year, according to Cowen & Co. Its clothing
and accessory sales are expected to grow nearly 30% next year, to
$28 billion. Currently, Amazon claims only 6.6% of the apparel
market, but that is expected to increase to 16.2% in the next
Those numbers were based on a model without factoring the Prime
Wardrobe, so it’s possible the growth will surpass even that.
All these changes add up to Amazon becoming a go-to place to buy
your future wardrobe, especially for the young and affluent
households who already shop frequently on Amazon for other goods.