Dive Brief:
- Amazon on Tuesday announced its latest foray in the fashion world: Prime Wardrobe. The new apparel subscription service (currently in beta) allows Prime members to order three items or more with no upfront charge, take a week to decide and pay for items they’d like to keep.
- Unlike other popular box services like Stitch Fix and Birchbox, the service is not a monthly subscription, nor is it recurring. Shoppers can choose from 1 million eligible items from men’s, women’s, girls’, boys’, baby clothing, shoes and accessories categories. Featured brands include: Calvin Klein, Levi’s, adidas, Timex, Carters and more.
- Prime members are incentivized by discounts to keep items by earning 10% off if they keep three or four items and 20% off if they keep five or more. Products come with a prepaid label for returns and can be dropped off at any UPS location. Prime members can also request a free pick up from their home, the company said.
Dive Insight:
Amazon has an insatiable need to rock the fashion world, dominating the category in the same way it conquered books. While shares of the e-commerce giant edged up slightly on the news, most apparel retailers felt a drop: Ascena 7.8%, Gap 3.8%, Nordstrom 3.5% and American Eagle Outfitters 3.9%, among others, according to MarketWatch.
Amazon will dethrone Macy’s this year as the largest seller of apparel in the United States, and with the help of emerging technology (its strong suit), has embarked on a mission to redefine fashion with the convenience of the shopper in mind. In March, Amazon released its Outfit Compare mobile feature, allowing Prime members to share photos of themselves wearing two different outfits and receive ratings from Amazon stylists and fashion experts. Then in April, the e-commerce giant took that technology one step further with a new piece of hardware, the Echo Look. The narrow, oval-shaped device can take full-body photos and videos, and logs them in a "Lookbook." The device also includes a "Style Check" feature that allows users to choose two outfits to compare. Alexa then delivers a judgment based on automated assessment of factors such as fit, color, styling, seasons and current trends.
Amazon’s latest move is a direct challenge to the successful model Stitch Fix has arguably dominated and an effort to ease the process of "try before you buy" and reduce returns, for good reason. According to a recent study from Narvar, the bedroom is the new fitting room: 40% of shoppers "bracket" their purchases, meaning they buy multiple items with the intent to return some of them. This isn’t surprising considering the problem of fit, which is one major reason many shoppers still go to the store to touch, feel and try on apparel (among other items) before buying. Those who do bracket their purchases present a logistical nightmare for retailers.
"One thing to understand is that all direct to consumer apparel retailers have high return rates. It comes with the territory. And when the product comes back there are logistical issues relative to whether it’s instantly re-saleable or not,” Paula Rosenblum, RSR Research co-founder and managing partner, told Retail Dive in an email. “I don’t really think it’s a viable and scalable long term solution, but it solves a short-term problem. My opinion is that the ultimate solution is for Amazon to buy apparel stores. But first they have grocery to absorb.”
Amazon Fashion did not respond to a request for further information on the launch of the service.
