Amazon’s Department Stores to Highlight Apparel

Amazon Seeks Apparel Dominance

Amazon (AMZN) is making plans to roll out brick-and-mortar department stores. The stores are being designed to showcase the ecommerce giant’s private-label lines of clothing as it works to boost sales for its apparel offerings. By stocking physical stores with its jeans, t-shirts, dresses, and other clothing, Amazon provides consumers with the ability to try items on. This gives consumers a shopping experience which is not available through Amazon’s ecommerce site.

Apparel tends to have higher profit margins than other products, but returns cause significant hassle for ecommerce companies. By having a physical place to try on clothes, Amazon hopes to reduce returns. Amazon will also include a mix of clothing from brands which are already sold on its website. However, the focus will be on boosting brand recognition for its own lines of clothing. The first of these department stores are slated to open next year in San Francisco, California, and Columbus, Ohio.

Amazon’s Private Label Ambitions

For years, Amazon has been aggressively expanding the number of private-label categories it offers. It entered the clothing market in 2016 and now has over 100 clothing brands. Amazon wants to use physical stores to sell its own brands, reach a new crop of consumers, and test out its advanced shopping technologies.

The move to open large department stores comes as consumers are venturing into stores again after pandemic shutdowns. Macy’s (M) and Kohl’s (KSS) have posted strong sales in recent months as pent-up demand caused consumers to spend more money at retail stores.

High-Tech Fitting Rooms Coming Soon

The fitting rooms in Amazon’s department stores are expected to be filled with technology. The company is currently testing the idea of allowing customers to scan QR codes of the items they want to try on via an app. Associates would gather the items and leave them in a fitting room for the customer. A touchscreen in the fitting room would enable customers to request more items or review recommendations. Eventually Amazon could deploy robots to fetch sizes and other clothing for customers in fitting rooms.

Amazon’s department store concept is still in the early stages. But once the department stores open and gain prominence, they could cause big changes in the retail industry.

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