J.Crew to Sell on Amazon: Why It Matters for Both Companies

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Amazon AMZN , now the second company to reach $1 trillion in market value, has approached its customers with more good news: Amazon Prime members can now shop J.Crew on Amazon Fashion with its standard free two-day shipping.

The e-commerce giant is giving J.Crew Mercantile, upscale apparel brand J.Crew's less expensive line, its own digital storefront. Amazon will be responsible for the listings as well as shipping of products.

Although Amazon's apparel section might not be its most popular section, the company has been building it up through continuous efforts. Currently, it has other retailers such as Chico's FAS CHS , PVH-owned Calvin Klein PVH , and Nike NKE available on the site. Additionally, Amazon has been developing its own brands, such as Lark & Ro.  

Starting Wednesday, customers can buy trendy J.Crew clothing on Amazon-more conveniently than ever. Many people would agree that Amazon's forte lies in its convenience and easiness in terms of shipping and returning. There are few retail online shops that can beat that.

Previously, J.Crew has resisted selling its products through Amazon. In fact, it has mostly relied on its own stores and website to control distribution. However, last week, J.Crew managed just a slight uptick in same-store sales after 15 quarters of declines. So, this creates a milestone in J. Crew's marketing strategy. With its strong position in the fashion market, coupled with the convenience of Amazon, J. Crew can attract more customers.

 "There are other discount retailers that have developed their own lower-priced versions of J.Crew... Amazon wanted to work directly with the people who created the concept," J.Crew CEO James Brett said.

He added that the brand and Amazon have developed a "good understanding" with each other. He also said he doesn't expect this partnership to hurt store sales, as that didn't happen when they introduced part of the company's line to Nordstrom.

With the e-commerce business still growing, this can be a win-win situation for both sides: J.Crew gains a larger customer base and increased accessibility for customers, while Amazon can generate more sales through its own platform.

Another big catch for some brands selling on Amazon is that Amazon can curb unauthorized purchases from third-party sellers.

But despite these reasons to sell through Amazon, many retailers don't trust the website, as they are not sure how Amazon will use their customer data and if they will change item prices.

Interestingly enough, however, a report by Morgan Stanley has predicted Amazon will become the number one player of the U.S. apparel industry by year end.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks
Referenced Symbols: AMZN , CHS , NKE , PVH

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