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Amazon Shakes Up Fashion With Prime Wardrobe Beta Launch; Experts Weigh In

  • Written by  Klaudia Tirico

Amazon is on a roll. The e-Commerce giant turned the grocery vertical on its head with its Whole Foods acquisition, and now it’s aiming for the fashion industry with Prime Wardrobe. This new Prime membership benefit is quite similar to “try before you buy” subscription services such as Trunk Club and Stitch Fix, as well as pure-play retailers like Warby Parker, that allow customers to order shoes, accessories and clothing at no charge and pay only for the items they want to keep.

Prime Wardrobe shipments will come with a re-sealable box and a prepaid shipping label. Customers will have seven days to decide whether they want to return or keep items. The service — currently in beta — will be an added benefit for all Prime members.

This concept is far from new, but Amazon’s twist on it may have Trunk Club and Stitch Fix shaking in their trendy boots. Prime Wardrobe includes brands outside of the retailer’s own, including Adidas, Levi’s and Calvin Klein, and provides a 20% off discount if customers keep five or more items. Customers who keep three to four items will receive a 10% off discount.

Industry experts agree that this is a good move on Amazon’s part and that the rest of the retail industry, particularly the apparel segment, should look to improve its game. Now is a good time to ensure all ducks are in a row in order to stay afloat, including: 

  • Streamlining fulfillment;
  • Enhancing product assortments; and
  • Providing capabilities for more streamlined repurchasing, especially in the case of Trunk Club and Stitch Fix.

The timing of the launch may seem coincidental, as rival Walmart just purchased Bonobos in an effort to upgrade its fashion offerings and differentiate itself from competitors. Walmart also has put Moosejaw, ModCloth and Shoebuy under its belt in terms of fashion.

Is Prime Wardrobe an outlet for Amazon to stay a step ahead of Walmart? It’s not that simple, according to Mohannad El-Barachi, General Manager of SweetIQ.

“Walmart is trying to broaden their online footprint, however, they are still connecting with in-store customers as well,” said El-Barachi in an interview with Retail TouchPoints. “Walmart has the opportunity to connect their online shoppers to in-store experiences, and this is where most retailers will still want to win.

To compete with brick-and-mortar giants like Walmart, Amazon was forced to get creative. They are offering a novel experience that provides unique value to their millions of users to set themselves apart. Amazon will always be challenged by the realities of e-Commerce: building a brand without the convenience of the true purchasing immediacy that brick-and-mortar allows. This is Amazon’s way of offering something different to make up for what they lack.”

Success Stories With ‘Try First’ Model

A few retailers have benefitted from the “try before your buy” movement:

  • Trunk Club was acquired by Nordstrom in 2014 for $350 million;
  • Stitch Fix is reportedly close to becoming a billion dollar brand;
  • Jewelry subscription service Rocksbox is reported to have a 20% rental-to-purchase conversion rate, according to Forbes.

Whether or not Amazon intends Prime Wardrobe to compete directly with Walmart, the online retailer clearly is looking for new ways to leverage its large (and growing) Prime membership.

Industry Experts Share Their Thoughts On Amazon Prime Wardrobe 

In light of the new beta launch, read on to see what industry experts are saying about what Prime Wardrobe means for competing retailers and the overall industry.

Tom Erskine, CMO, One Door

“Long term, it’s easy to imagine a limited number of omnichannel retail supply chains in the U.S. — Walmart and Amazon — and brands ’renting space‘ on those supply chains while maintaining a customer facing presence, as opposed to building and maintaining their own. We’ve seen this happen in other industries, like wireless networks, where a few major players dominate the market, but brands like Cricket, Virgin, Boost, MetroPCS still attract a different customer. If this kind of consolidation happens in retail, then back-office supply chain investments should take a backseat to focus on investments in technology that help differentiate the customer experience.”

Tushar Patel, CMO, Kibo

"Services such as Stitch Fix have created their reputation on giving the customer a truly personalized experience by sending specially curated apparel. The model is meant to be a time saver as the curated box just shows up and they can easily return what they don't want or like.

I would imagine Amazon may hit some roadblocks in terms of personalization as it doesn't appear they will offer Prime customers a style department providing the same service. Instead, shoppers will still need to take time that they may not have to browse and choose clothes themselves. In this way, shoppers will lose the personalized experience of being styled by a fashion professional and gain a bit more friction throughout the purchase journey.

If this program from Amazon is successful, it may force retailers to look at having better return policies or rolling out similar ‘try before you buy’ initiatives for online shoppers. Regardless, it will be important for retailers to further invest in their fulfillment options and roll out additional initiatives such as reserve online and pickup in-store."

Adrien Nussenbaum, U.S. CEO and Co-founder, Mirakl

"Amazon will quickly level the playing field on fashion expertise, and put Stitch Fix and Trunk Club at a significant disadvantage. These other brands offer concierge experiences, but they lack a seamless repurchase experience with extensive product selection. This frustrates their customers and Amazon will alleviate that frustration.

The retail landscape has already been transformed by concierge services and by entering the concierge space, Amazon is further validating the demand. Combining the concierge experience with a seamless way to repurchase the same or similar products will be a successful endeavor for Amazon." 

Charles Dimov, Director of Marketing, OrderDynamics

"To make this a successful service, the key will be the level to which Amazon can get the brand retailers, with established and loyal customers — engaged. Brands with large numbers of shoppers living far from store locations, or any other large retail center, will probably benefit most from an omnichannel service like this. It is about educating those customers about the retailer’s new offering to make it easier and more convenient for them. It is all about the customer experience, after all.

Potential roadblocks are going to be the willingness of customers to test out the service, and of retailers to try it. From a retailers’ perspective, will there be significant additional costs they will have to incur — such as shipping fees or excessive returning inventory? Online returns already can approach the 20%-40% range! It also means that a retailer’s inventory is tied up during the ‘trying on’ phase. These are not show stoppers, but should be considered by the retailer in advance.” 

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