Amazon

Is Amazon Making Peace With Its Retail Frenemies?

Senior Entrepreneurship Writer at CNBC
2 min read

That old cliché, “never say never” is a cliché for a reason. Whoever you think is your worst enemy now may end up being your knight in shining armor down the road. And so it is with Amazon and Abercrombie.

Major fashion retailers, including Abercrombie and Fitch, JCrew, Neiman Marcus and a half dozen or so others are in talks with Amazon, sources tell The Wall Street Journal. This is a major about-face given that many traditional retailers have adamantly rejected working with the great white whale of e-commerce. These fashion retailers haven’t wanted to let go of any control over their brand, in particular over how items would appear on Amazon’s website.  

Related: Amazon Wants a Hit Series of Its Own

As part of the deal, Amazon wouldn’t actually sell goods from these retailers directly to consumers, the Journal reported. Rather, consumers might see a JCrew shirt on Amazon, and would then be directed from Amazon to JCrew's website, where they would complete the purchase.

What the retailers would ostensibly get is traffic. After all, Amazon is the great super-highway of e-commerce, so anything that appears there would provide retailers more eyeballs -- and, in theory, revenue.

Related: Amazon Just Bought a Video-Game Company

For Amazon, the deal would offer two major bonuses: expanded product offerings and data. Amazon said a couple of weeks back that it may have to raise the price of its popular Amazon Prime subscription by between $20 or $40. The service, which is now $79, provides free shipping on most items and streaming of movies and television shows. Partnering with the likes of Abercrombie would give Amazon an extra selling point to win over consumers as the company mulls raising the price of Amazon Prime.

Also, Seattle-based Amazon gets access to a whole new swath of data about consumers. In a world where marketing is increasingly becoming targeted specifically to the tastes and preferences of each individual, more data is more power is more money.

Amazon would neither confirm nor deny the reports. "We do not comment on rumors and speculations," an Amazon spokesperson told Entrepreneur.com. 

Related: Your Amazon Prime Subscription May Get More Expensive

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