It's no secret that Amazon (AMZN) has ambitions to grow far beyond it's seemingly omnipresent cloud and retail businesses.
Recently, the trillion-dollar company shelled out billions of dollars for the right to exclusively show Thursday Night Football. It also recently acquired autonomous robot vacuum Roomba for $1.7 billion in a now infamous deal.
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Amazon Wants a Deeper Foothold in Fashion
Few tech giants can also say they're intimately familiar with the business of fashion, but that's exactly what Amazon has been targeting in recent years. It's sold apparel since 2002 (early in its meteoric rise to market share domination). It acquired Shopbop in 2006 and Zappos in 2009 -- both mature retailers in their own right with large online footprints.
Now, Amazon is the biggest clothing retailer in the U.S. and continues to nab shoppers from Target (TGT) and Walmart (WMT). You can buy everything from Adidas (ADDDF) sneakers to North Face hoodies. In fact, Amazon's top-selling product is actually footwear -- not books, which were the bread and butter of its online business when it was founded.
Amazon's popular in-house Amazon Fashion product contributes to its dominance, which includes a Prime Wardrobe and Personal Shopper by Prime Wardrobe in the same spirit as StitchFix, allows buyers to try items for a week before committing to them.
Amazon Makes a New Deal Worth its Weight in Gold
On Jan. 13, Amazon announced it would partner with secondhand clothing shop Rent the Runway (RENT) , a beloved but beleaguered retailer that allows shoppers to rent clothes rather than buying them.
Rent the Runway enjoys popularity among wedding guests, gala goers, and grads, as it allows shoppers to wear high street and couture labels at a fraction of the cost -- and without having to commit to a dress for more than a few hours. It's viewed as a solution to fast fashion, which is often wasteful and produces poor-quality staples. It's also struggling financially; Rent the Runway reported a $36.1 million net loss in Q3.
The Amazon partnership may alleviate some of those sticking points, though. Rather than having a lot of inventory sitting around waiting to be rented, Amazon's partnership will allow Rent the Runway to actually sell its gently used goods -- and move some of its inventory off the balance sheet.
"At Amazon Fashion, we continually expand our assortment through strategic relationships with brands to inspire and delight our customers,” Amazon Fashion President Muge Erdirik Dogan said in a press statement. "Rent the Runway’s collection continues to grow our offering in pre-loved and designer fashion."
Secondhand fashion is currently something of a sensation; a recent study found that most Gen Z shoppers prefer to buy from sustainable brands and care more about sustainability than brand names. They would also pay up to 10% more for sustainability, which is presumably music to Rent the Runway -- and Amazon's -- ears.
