On Tuesday, in its attempt to corner the last elusive space of the retail market - clothing -  Amazon announced the launch of Prime Wardrobe, "A New Fashion Platform" which will be included in current and future Prime memberships, Amazon said on its website. Essentially Prime Wardrobe will allow users to try clothes on before they buy and receive discounts.

This is how Amazon's latest service, currently in beta, will work according to TC:

  • Buyers will pick at least three items from over a million Amazon Fashion options including clothes, shoes, and accessories for kids and adults to fill up your Prime Wardrobe box. Brands available include Calvin Klein, Levi’s, Adidas, Theory, Timex, Lacoste, and more.
  • Once the Amazon Prime Wardrobe box arrives, you can try on the clothes for up to seven days. Then you either schedule a free pick-up or drop the resealable box with its pre-paid shipping label at a nearby UPS to return whatever you don’t want. Keep three or four items from the box and get 10% off everything, or keep five or more for 20% off. You only pay after for what you keep, with no charge up front. Amazon Prime Wardrobe is free for Prime members with no extra fees.

While we can see extensive ways how this "goodwill" arrangement between Amazon and its millions of clients can be abused, the logic behind the new launch is simple: by taking the hassle and regret out of returns for clothing, the same way Zappos did before it bought it, Amazon hopes to make people more comfortable pulling the trigger on an online apparel purchase, especially when including the bonus discount. Meanwhile, a poor choice only costs you a trip to UPS. The move could be quite lucrative for Amazon, as apparel’s share of all digital spend has grown for the past three years straight from 15.4% in 2013 to 17% in 2016, according to comScore.

Unlike similar services, such as Stitch Fix and other fashion delivery services where you are shipped a box of clothing you don’t choose which is targeted at people who don’t like shopping (especially men) Prime Wardrobe allows customers to pick and choose what they want rather than delivering a random grab bag. Tech Crunch muses that if Wardrobe tests well, Amazon would consider acquiring Stitch Fix, TrunkClub, or another boxed fashion delivery service to instantly boost its scale.

Prime Wardrobe will also aligns with the Amazon Echo Look that takes full-length photos of you to review your day’s clothing choices and uses the Amazon StyleCheck app feature to have AI score your fashion decisions. In other words, Jeff Bezos will first help you pick your clothes for you, and then sell them.

Eventually, Prime Wardrobe will also integrate with the Amazon Fashion vertical that features upscale clothing.

As Jeff Bezos said a decade ago, “In order to be a $200 billion company we’ve got to learn how to sell clothes and food.” Of course, while central banks have helped Amazon surpass this particular bogey long ago, nailing the clothing ecommerce experience which has been rather elusive for the online retail giant will further expand Amazon’s monopoly on the complete retail experience. Which is all great news for AMZN shareholders, it is terrible news for existing clothing retailers who will suffer even greater sales and margin erosion, leading to more store shutdowns, and even more bankruptcies.

As a reminder, according to Moody's here is a list of the most distressed US retailers...

... and the carnage, as discussed recently, has already resulted in a record number of annualized store closures. This number is set to explode if Amazon's new offering gains traction.




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