Amazon.com Inc. is trying to enter the apparel department. The online retail company is best known for its wealth of online shopping options. And now it is launching a new service called Prime Wardrobe, which is momentarily available only for its Prime members.
Amazon Prime Wardrobe
The Amazon Prime Wardrobe is, in its essence, a service through which the giant online retailer is trying to gain more market share in order to increase its revenue. The principle is that customers can choose as much as 3 or more available apparel items they want to try on. The trial period is seven days long. And customers receive a 20% discount on what they keep.
With this move, the Amazon Prime Wardrobe scared other competitors, while also creating a drop of shares as much as 3% for other retailers, like Nordstrom and Gap Inc.
As easy as it might sound, apparel is, in reality, a difficult segment for online retailers. The main reason is that, without a good sales associate, which can be found in a physical store, online retailers are at a loss. This is because, for most of the apparel customers buy online, 40% of the products are returned to the retailer.
And as far as Amazon’s success is concerned, the main problem that the Amazon Prime Wardrobe might face is that of too many options. This can prove cumbersome for some people, as Joel Bines, the co-head of AlixPartners LLP’s retail practice, says.
However, for the Amazon Prime Wardrobe, the online retailer has convinced brands as Calvin Klein, Kate Spade, and Levi Strauss to sell their products on its shopping channel. According to an Amazon spokeswoman, this
“makes it easier for customers to touch or see items in person when buying clothing, shoes, and accessories online”.
Should the Amazon Prime Wardrobe succeed, the retailer could gain significant market share growth and could expand its operations strategy further.
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