Amazon Begins Test of Apparel
Amazon.com Inc. is testing the sales of apparel through an effort internally codenamed "Project Ruby."The largest Internet-only retailer yesterday sent e-mails to its best customers, asking them to click on www.amazon/ruby. The apparel and accessories store will stock products from more than 400 brands like Lands' End, Foot Locker, Gap, Old Navy, Nordstrom, Eddie Bauer and Target.
"Before we release it broadly, we wanted to give our best customers a chance to try it first (warts and all) and give us feedback," Jeff Bezos, Amazon's CEO, said in his e-mail to selected customers on the Seattle company's file
"Our goal is to provide complete apparel selection and offer it the Amazon way -- with easy navigation, a single shopping cart, your ordering payment information already on file, etc."
To encourage sales, Amazon is offering a $30 promotional certificate when the consumer spends more than $50 in the new store. Consumer feedback also is solicited.
The apparel store is slated to go public anytime now.
Amazon's foray into apparel comes seven years after it started life as an online bookseller. Since then it has expanded into music, video and DVD, kitchen items and electronics.
The apparel category online is fifth in sales after travel, automotive, computer and software, and office, home and garden.
U. S. online apparel sales last year were $4.4 billion, with projections of $5.2 billion this year, according to the State of Online Retailing 5.0 study by Boston Consulting Group for the National Retail Federation's Shop.org e-commerce trade body.
Amazon has had success partnering with retailers like Toys 'R' Us and Target to sell their products through its site. The intermediary strategy seems to have worked. Twenty-three percent of all products Amazon sold in North America in the third quarter were via transactions by third parties like Toys 'R' Us, Target and the myriad sellers of second-hand goods. Amazon gets a cut of all sales.
The apparel store takes the strategy a step further toward making Amazon more of a portal on the lines of Yahoo, MSN and AOL.
Amazon, however, does continue to run the risk of diluting its brand and spreading itself too thin.
The company had no comment on this latest move.
"Beyond the e-mail from Jeff, we just don't have anything to add right now," said Bill Curry, director of communications at Amazon.
