Amazon.com (New York) is believed to be opening an online apparel store this summer or in early fall, probably in time to fix any problems before the holiday shopping season begins. Several retailers said they have been approached by the Internet e-tail organization.
The oft-struggling company, which has held the line on product expansion for the last nine months, feels apparel has become a popular online category. Recent research says that the $5.3 billion that consumers spend on apparel and accessories is roughly 10 percent of all online merchandise spending.
An Amazon spokesperson would not confirm the company's plans, other than to note that Amazon ceo Jeff Bezos “has said it's an area we'd be getting into at some point.” The retailers, who spoke to The New York Times on condition of anonymity, said Amazon has been actively seeking partners who would sell their goods through the company's web site in a sort of online mall. Nordstrom and Gap (and perhaps Gap's sister companies, Banana Republic and Old Navy) are said to be likely participants in the initial roll-out, among other large retailers and smaller accessories companies.
Amazon has partnered with retailers in the past — most notably Toys “R” Us — but a one-merchant-per-category arrangement wouldn't work as well in apparel, said The Times, because no single apparel-maker or retailer offers a spectrum of goods broad enough to satisfy Amazon's 34 million customers and 37 million monthly visitors.
Also, Amazon is probably not looking for a retailer that would simply hand off its warehousing and shipping operations (as Toys “R” Us did). Analysts said the apparel companies that shoppers would most want to see on Amazon have already refined online and shipping operations of their own.
There is precedent for selling apparel on Amazon. eLuxury, a division of LVMH Mo‘t Hennessy Louis Vuitton, has occupied space on Amazon's site since November. As part of that arrangement, Amazon customers who click on the eLuxury link are taken to an eLuxury site within Amazon — eLuxury then handles the transaction. And Target sells apparel on its Amazon-based store, but with Target handling the sales, shipping and customer service. (However, noted The Times, beginning this summer, Target plans to rely more heavily on Amazon to conduct the transactions, ship products and handle customer service inquiries.)
But Amazon will be looking for powerhouse apparel brands to anchor the new category. It is highly unlikely, said the Times, that Amazon — so widely cited as the exemplar of online shopping — would roll out an apparel store lacking marquee names.
Some retail executives feel Gap would fill Amazon's needs. Both Gap and Banana Republic appeal to the type of shoppers who frequent Amazon, shoppers with a median household income of $77,000, according to Forrester. Through Gap's Old Navy brand, which is aimed at more price-sensitive shoppers, Amazon could also attract lower-income shoppers who browse the site for clothes.
Moreover, through its three retail divisions and various product categories, Gap Inc. can cover a wide swath of apparel categories than most other retailers can. And Gap's participation could also help Amazon attract other big-name retailers. Gap, not surprisingly, declined to comment.
“Gap has had its problems lately,” said a retail analyst, “and needs to do some brand-building, so maybe this is something it would consider.” The main thing, she said, “is not to be shelling out a bunch of cash. Gap needs that to rebuild.”
Analysts have long said that clothing is one of the more difficult things to sell on the web, given the importance of an item's fit and feel, and the customer service problems that accompany such sales. Customers are said to send back roughly one-third of the apparel they buy online.