Should Gap sell on Amazon?
In answer to a shareholder’s question at its annual meeting, Art Peck, Gap Inc.’s CEO, said the retailer would be open to selling its merchandise on Amazon or other third party sites in the U.S.
“To not be considering Amazon and others would be in my view delusional,” Mr. Peck said. “
While asserting that no discussions were in place, he further elaborated two days later on the company’s first-quarter conference call, “Amazon’s presence in e-commerce is undeniable in this country, and therefore, to not fully consider all the options of distribution for us would be to not be thinking about things that were important to us.”
The discussion comes as Amazon has persuaded Calvin Klein, Levi Strauss, and some other department store mainstays to sell on its online marketplace as part of its fashion push.
Ugg, the fashion boot brand, admitted last week it is in “early days of discussion” with Amazon, partly because nearly half of all searches online start on Amazon.com. Dave Powers, president of Deckers Brands, told analysts last week, “As we look at the realities in the marketplace and how things are shifting and where the consumers are shopping, I believe it’s in our best interest to partner closely with them and control our destiny.”
While seeing benefits in gaining access to Amazon’s massive consumer reach, many potential sellers remain wary about how the online giant could exploit customer data. Retailers would also lose total control of the shopper experience.
The Wall Street Journal noted that as early as 2014, Abercrombie & Fitch was one of 10 popular retailers in discussions to list products on Amazon’s online marketplace. Any searches would have directed browsers to the retailer’s site and not Amazon.com.
On its first-quarter conference call, Abercrombie & Fitch’s executive chairman Arthur Martinez wouldn’t rule out selling on Amazon. He said, “As our brands come back to their status and health, we will be looking for additional channels to take our products. I would never say never to anything.”
- Gap CEO Says He’s Open to Selling on Amazon – The Wall Street Journal (sub. required)
- Amazon Struts Its Fashion Sense, Challenging Traditional Stores – The Wall Street Journal (sub. required)
- Abercrombie’s Sales Slip as Fewer Shoppers Visit Its Stores – The Wall Street Journal (sub. required)
- Yes, Gap is thinking about selling on Amazon, but not right now – Internet Retailer
- More retailers want in on online marketplaces – RetailWire
- Deckers Brands Q4 Conference Call – Seeking Alpha
DISCUSSION QUESTIONS: Should national apparel chains sell on Amazon.com given Amazon’s online dominance? How would you assess the potential benefits and risks?