It’s no secret that Amazon (AMZN) – Get a free report it has ambitions to grow well beyond its seemingly ubiquitous cloud and retail businesses.
The billion-dollar company recently shelled out billions of dollars for the right to exclusively show Thursday Night Football. It also recently acquired the Roomba autonomous robot vacuum for $1.7 billion in a now-infamous deal.
Few tech giants can also say they’re intimately familiar with the fashion business, but that’s exactly what Amazon has been looking for in recent years. It has been selling clothes since 2002 (at the beginning of its meteoric rise to market share dominance). It acquired Shopbop in 2006 and Zappos in 2009, both mature retailers in their own right with large online footprints.
Amazon is now the largest clothing retailer in the US and continues to attract shoppers from Target. (TGT) – Get a free report and walmart (WMT) – Get a free report. You can buy everything from Adidas (ADD) from sneakers to North Face hoodies. In fact, Amazon’s best-selling product is actually shoes, not books, which were the bread and butter of its online business when it was founded.
Amazon’s popular in-house Amazon Fashion product contributes to its dominance, which includes a Prime Wardrobe and Prime Wardrobe Personal Shopper In the same spirit as StitchFix, it allows buyers to test items for a week before committing to them.
Amazon makes a new deal that is worth its weight in gold
On January 13, Amazon announced would associate with thrift store Rent the Runway (RENT) a beloved but beleaguered retailer that allows shoppers to rent clothes rather than buy them.
Rent the Runway is popular with wedding guests, gala attendees and graduates as it allows shoppers to wear high street labels and couture at a fraction of the cost, and without having to commit to a dressed for more than a few hours. It’s seen as a fix to fast fashion, which is often wasteful and produces shoddy basics. You are also struggling financially; Rent the Runway reported a net loss of $36.1 million in the third quarter.
However, the Amazon partnership may alleviate some of those sticking points. Instead of having a lot of inventory waiting to be rented, the Amazon partnership will allow Rent the Runway to sell its gently used products and take some of its inventory off the balance sheet.
“At Amazon Fashion, we continually expand our assortment through strategic brand relationships to inspire and delight our customers,” Muge Erdirik Dogan, president of Amazon Fashion, said in a press release. “The Rent the Runway collection continues to increase our offering in second-hand and designer fashion items.”
Second-hand fashion is currently something of a sensation; a recent study found that most Gen Z shoppers prefer to buy from sustainable brands and care more about sustainability than brands. They’d also pay up to 10% more for sustainability, which is presumably music to the ears of Rent the Runway and Amazon.
