Amazon.com Inc. is increasingly claiming territory once held exclusively by department stores, and it's doing so again, essentially by placing a dressing room in your house.
Amazon is testing a new service for Prime members that allows them to try on the latest styles before they buy at no upfront charge. Customers have seven days to decide what they like and only pay for what they keep. Shipments arrive in a re-sealable box with a pre-paid label for returns.
Amazon said Tuesday that more than a million pieces of clothing and accessories are eligible under the service and include brands such as Calvin Klein, Hugo Boss, Theory and Levi's, labels that are big names at department stores. Shoppers receive discounts depending on how much they keep.
Prime Wardrobe is Amazon's latest thrust into fashion and could be another big blow to department stores like Macy's, which are struggling with weak sales. It's also a potential concern for Walmart, which has been snapping up online clothing brands including ModCloth and Bonobos as it tries to snare millennials.
But Amazon's new service is a threat to newer, online businesses as well; clothing subscription services like Stitch Fix, which charge a styling fee of $20.
Amazon has made a concerted push to expand into fashion through private labels such as Lark & Ro. But with Prime Wardrobe, it's bidding for more loyalty from already devoted members of Prime.
Amazon is poised to surpass Macy's this year as the largest U.S. clothing seller, according to Cowen & Co. analysts. The industry observer expects Amazon's share of the U.S. clothing market will increase from 6.6 percent last year, to 16.2 percent by 2021.
Prime Wardrobe works this way: Shoppers pick three or more items and then have a try-on period to find the best styles. For items they want to discard, customers can drop off at a UPS location or schedule a free pick up. Shoppers will receive 10 percent off if they keep three or four items or 20 percent off for five items or more.