Amazon recruits retail fashion stars for its marketplace
Amazon is in discussions with about 10 prominent fashion retailers, including J. Crew, Abercrombie & Fitch and Neiman Marcus, in regards to selling on Amazon’s marketplace.
Sources told The Wall Street Journal that Amazon would list the goods on its site, but customers would go to the retailers’ websites to make the purchases. Similar to existing programs offered to smaller retailers, the retailers would pay Amazon fees for directing traffic to their websites and for any resulting transactions. Potential sellers also include Lord & Taylor and vendor/retailer Ralph Lauren.
Beyond any fees, the move would fill voids in Amazon’s offerings. In 2012, Amazon launched a push to upgrade its apparel assortments with a particular focus on adding more high-fashion labels. Calvin Klein, Rebecca Minkoff and BCBG Max Azria are among those already selling on the website.
The broader assortments would also support Amazon’s Prime shipping program at a time when a hike in the annual $79 membership fee is being considered. Even though the retailers would be responsible for arranging and paying for the deliveries, Prime members would still receive free delivery, according to Journal.
Adding more of the best fashion retailers to its website could also help Amazon compete with Google. Recent studies have shown that more and more people are starting their search at Amazon rather than Google.
"It’s a battle about who is going to control access to the customer, because shoppers may instead come to search for brands on Amazon," Gerald Storch, CEO of Storch Advisors and former CEO of Toys "R" Us, told The Dallas Morning News.
Finally, Amazon gains more access to the shopping habits of a lucrative set of customers.
For retailers, the risks were more extensive, particularly partnering with a massive, potential competitor willing to lose money to break into different markets. Some smaller third-party sellers on the website in the past have charged that Amazon uses its marketplace to test pricing strategies and find and develop new products to compete with them.
Retailers also reportedly have reservations over relinquishing control over styling and photography. Selling on Amazon’s expansive site may also tarnish a fashion brand’s cachet.
- Amazon Tempts the Anti-Amazons – The Wall Street Journal (sub. required)
- Amazon wants to ‘help’ stores – The Dallas Morning News
- Amazon in talks with traditional retailers: Report – CNBC
Would you advise major fashion retailers to participate in Amazon’s marketplace? Do you see a significant risk from Amazon gaining shopper insights on participating retailers’ customers?