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The Honolulu Advertiser
Posted on: Tuesday, November 12, 2002

Amazon plans to add clothing to offerings

By Byron Acohido
USA Today

Amazon.com, the world's largest online retailer, this fall will begin offering clothes through alliances with Lands' End, Gap and Nordstrom, according to published reports.

Although the companies involved declined comment, technology analysts say such a move fits with CEO Jeff Bezos' recent comments that Amazon has been working on a "new store" for almost a year.

During a recent conference call with reporters and analysts, Bezos indicated Amazon plans to promote the store heavily during the holidays, but declined to specify what goods it will feature.

Reports have been circulating since July that the e-tailer has been planning to branch into apparel.

For the past two years, Amazon has been steadily expanding the array of goods available on its Web site — from toys to housewares — via creative partnerships with the likes of Toys R Us, Target, Marshall Field's, Circuit City and Office Depot.

Company watchers expect Amazon to announce the creation of a separate Web page featuring clothing from an expanded list of retail partners.

A computer user would be able to select a sweater from several retailers, then include it in the same order with the latest best-selling book.

Amazon would ship the book, and the retailer would handle the sweater.

"The deal potentially provides positive synergies for all parties," said Dan Geiman, tech analyst at McAdams Wright Ragen. "It should attract more visitors to the Amazon.com Web site, while providing more traffic for the retailers."

Partner transactions, which include goods shipped by brand-name merchants and individual sellers of used goods, accounted for 23 percent of Amazon's North American sales in the third quarter.

Lands' End, Gap and Nordstrom each have established Web sites of their own and would presumably pay Amazon a fee for each sale generated through Amazon's Web site. Most of that revenue would flow to Amazon's bottom line. "There's little risk on the company's part," Geiman said.

Customers would benefit by having more choices on one Web site. "It makes for a better customer experience to be able to go to Amazon and put everything in one shopping basket," said Allyson Rodgers, tech analyst at Ragen MacKenzie.

Amazon could also help boost online apparel purchases by deploying software that helps customers compare brands, post opinions about products and receive pitches for other goods. Amazon has used such tools effectively to sell more CDs and books.