Retailers shift their ad spending from TV, radio and print ads to digital ads.
Building on a trend by retailers to reach broader audiences through Amazon.com, Lands’ End and others are looking into the sale of apparel products through the world’s largest retail web site.
Lands’ End is considering the sale of its apparel products through Amazon.com, Bill Bass, Lands’ End senior vice president for e-commerce and international, tells InternetRetailer.com. The move, which may also include other major apparel brands, is a continuation of a trend for retailers to use Amazon to reach a broader customer base.
"We are participating in a preview of apparel on Amazon," Bass says. He adds that Lands’ End, which was acquired earlier this year by Sears, Roebuck and Co., will wait until it decides whether to officially launch a presence on Amazon before providing details on how the new partnership would work. Other reports have indicated that Gap Inc. and Nordstrom Inc. are also working with Amazon, though spokespeople at these retailers have all declined to provide details on how they might cooperate.
For Amazon, the prospect of channeling sales for these retailers is consistent with its recent strategy of partnering with merchants as it enters a new retail category, says Neil Stern, a partner with Chicago-based retail consulting firm McMillan Doolittle. "Basically, they’re taking advantage of the enormous traffic on Amazon to provide leads to other retailers," Stern says. He adds that Amazon also offers high-level site maintenance and search technology, while leaving the inventory ownership and fulfillment responsibilities to its retail partners.
But the retail partnerships also raise questions regarding product returns, says Duif Calvin, a retail analyst based in San Francisco. She says Lands’ End and other retailers could risk seeing higher rates of product returns for sales made through Amazon. Another concern is whether Amazon customers will be able to return Gap, Nordstrom or Lands’ End products to those retailers’ physical stores, and whether that would require Amazon to then charge sales tax.
"Are brands like Gap and Nordstrom that pride themselves on multi-channel integration and great customer service going to tell customers they can’t return items to the store, especially when it states clearly on Gap’s and Nordstrom’s web sites that customers can return to stores?" Calvin says.
Another question is whether the Amazon platform can handle apparel merchandising. It’s OK for commodity-style clothing like Gap or Lands’ End khakis, but not for more fashionable clothing like Nordstrom’s, Calvin adds.
Nonetheless, Calvin says the partnerships with other retailers are a good idea for Amazon, since it gives Amazon another source of revenue and it could be good for the retailers if it gives them more traffic and sales. "Amazon is one of the few places on web, in addition to MSN, Yahoo Shopping and AOL, that get the equivalent of mall traffic," she says. "People just show up there."
Bass of Lands’ End agrees. He notes that a main goal of having Lands’ End products sold through Amazon and through Sears stores is to sell to a broader customer base. "One of the reasons we’re doing the preview with Amazon is we want to make it easy for people to buy our product," he says.