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Amazon: Fashion and Tech Central to Department-Store Strategy

A deep dive into the reported department store launch by Amazon from the Wall Street Journal indicates a notably apparel-heavy experience, which is said to put T-shirts, jeans and other garments from its own private labels on display for customers to model in tech-driven fitting rooms.

Amazon has already shown it can dominate the digital market for apparel and footwear, with Wells Fargo estimating that the e-commerce giant would generate $45 billion in revenue in 2021 from these categories. Already outperforming Walmart in sales by 25 percent, Amazon’s decision to bring its own labels into stores would elevate its profile as a seller of clothing and shoes, beyond its traditional image of hawking books, electronics and household staples.

Although the stores, set to open first near San Francisco and Columbus, Ohio, would predominantly feature Amazon’s private brands, the WSJ reported the retailer will also offer third-party brands that currently sell clothing on

As was the case in August, when the WSJ first broke the department store story, Amazon declined to comment on the report.

In an even stronger signal that the $1.7 trillion company is serious about its apparel ambitions, this would mark the first time Amazon brings apparel into its physical stores, which include Amazon Go, Amazon Books, Amazon 4-star and Amazon Fresh grocery stores (Whole Foods offers a few apparel items.). Even though Amazon is outselling the rest of the Internet, the company might feel it needs this kind of brick-and-mortar cachet to prop it up, especially as last year’s high-end, premium fashion launch has kept a relatively low profile.

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The online giant also has tried to take other steps to build hype around its fashion presence with the introduction of Prime Wardrobe, which includes the Personal Shopper subscription model that provides customers with a stylist who makes personalized recommendations. It’s gotten into a groove with The Drop, the influencer-driven platform in birthed two years ago that recruits social media personalities to help create trendy fashion usually sold for just 30 hours before being manufactured based on demand. Last week’s drop deviated from the usual format, instead showcasing world-class, record-breaking athletes modeling a curated New Balance fitness and lifestyle assortment.

Department stores, too, could serve as a platform to promote the clothing emerging designers conceive on “Making the Cut,” the Tim Gunn and Heidi Klum-hosted fashion-reality streaming series that brought Levi’s in to brainstorm a season-two challenge this summer and resulted in Gary Graham’s innovative genderless hemp take on the brand’s iconic Trucker jacket.

But despite the varying popularity of any of Amazon’s fashion forays, the growth of (and ensuing demand for) of the category remains high, with more Amazon clothes ending up in the hands of the shopper. Amazon only rolled out private-label apparel in 2016, yet it now controls more than 100 brands, according to Wells Fargo.

Although Amazon’s department store ambition may run counter to industry trends, especially given the sector’s overall decline in the past decade—Forrester analyst Sucharita Kodali described the move as “silly all around” to Sourcing Journal in August—the category has experienced a minor bounce back for the time being. Kohl’s reported a 31 percent jump over last year’s sales, while Macy’s sales soared 59 percent. What remains to be seen is whether these retailers can build on this momentum, or whether the success is purely due to the pent-up demand from muted consumer spending during the Covid-19 pandemic

As expected from a company that has brought technologies such as the sensor-driven Just Walk Out cashierless checkout to its slate of Amazon Go convenience stores (and now Whole Foods), as well as introduced a “pay with your palm” contactless platform called Amazon One, the proposed department store make technology integral to the shopping experience.

One such tech could perhaps expedite the fitting room experience. Customers would use a smartphone app to scan QR codes of items they want to try on, so that store associates could gather the items and place them in fitting rooms, sources told WSJ.

Once there, customers could use a touch screen to request additional garments, which would then possibly recommend other clothing to try on based on the pieces shoppers “liked.” The rooms could use sliding doors for associates to ferry in clothes without having to interact with the shopper.

At the very least, the fitting room experience could help reduce apparel returns, an industrywide concern that Amazon has responded to in many situations by just letting the shopper keep the product with the refund.

The report also indicated that robots or other forms of automation could eventually be deployed in the stores but there was no elaboration on what function the technology would serve.

There was no word on whether the projected 30,000-square-foot stores would include the Amazon Go or Amazon One technologies.

It’s also possible the potential stores, which could open as soon as next year, per WSJ, might offer Amazon’s reported point-of-sale (POS) system.

The reported POS has a portal that includes an Amazon checkout option and could centralize inventory and business analytics data. But the system would also link to other Amazon services, including Amazon One, and the tech titan’s Flex gig-worker delivery network.

Although the POS reportedly helps SMB consumers unify their online and offline channel management, the system would also be able to do that for an Amazon store without having to rely on another provider’s technology.