Amazon (AMZN) Taps the Fashion World to Bolster Prime Memberships
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Amazon.com (Nasdaq: AMZN) is looking to bolster its Prime membership program in a tres chic sort of way.
The WSJ has Amazon looking to invite in such fashion-forward names as Ralph Lauren (NYSE: RL), Lord & Taylor, and Abercrombie & Fitch (NYSE: ANF) to sell through its website. The retailers would sell directly to the customers and would also see a boost in traffic from the Amazon listing. In exchange, Amazon would be able to collect more customer data and better-position its Prime membership plan to those that would otherwise not consider joining.
Amazon's effort comes as its plans to raise the price of its Prime membership. It also won't be an easy deal to make.
Retailers generally view Amazon negatively, even if they sell through the site. The reason is that Amazon controls the listings; rankings, photos, and overall look.
The initiative, which could launch this summer, would run under the Prime plan. Prime allows for free two-day shipping to customers and this would need to be arranged and covered by the retailers. Retailers selling on Amazon also pay a fee, while Amazon collect another on completion of a transaction.
While it may seem like sour grapes for retailers, the idea of gaining a marked increase in web traffic and overall sales is hard to pass up. Investors in Amazon should keep this effort in mind as the summer approaches and a $20 to $40 price hike on the $79 annual Prime membership becomes a reality.
Shares of Amazon are up in early trading Friday.
The WSJ has Amazon looking to invite in such fashion-forward names as Ralph Lauren (NYSE: RL), Lord & Taylor, and Abercrombie & Fitch (NYSE: ANF) to sell through its website. The retailers would sell directly to the customers and would also see a boost in traffic from the Amazon listing. In exchange, Amazon would be able to collect more customer data and better-position its Prime membership plan to those that would otherwise not consider joining.
Amazon's effort comes as its plans to raise the price of its Prime membership. It also won't be an easy deal to make.
Retailers generally view Amazon negatively, even if they sell through the site. The reason is that Amazon controls the listings; rankings, photos, and overall look.
The initiative, which could launch this summer, would run under the Prime plan. Prime allows for free two-day shipping to customers and this would need to be arranged and covered by the retailers. Retailers selling on Amazon also pay a fee, while Amazon collect another on completion of a transaction.
While it may seem like sour grapes for retailers, the idea of gaining a marked increase in web traffic and overall sales is hard to pass up. Investors in Amazon should keep this effort in mind as the summer approaches and a $20 to $40 price hike on the $79 annual Prime membership becomes a reality.
Shares of Amazon are up in early trading Friday.
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