June 20, 2017 / 8:25 PM / a month ago

Amazon launches 'try-before-you-buy' fashion service

FILE PHOTO: Employees of Amazon India are seen behind a glass bearing the company's logo inside its office in Bengaluru, India, August 14, 2015.Abhishek N. Chinnappa/File Photo

(Reuters) - Amazon.com Inc (AMZN.O) wants to turn your living room into a fitting room.

The e-commerce giant, already one of the biggest apparel sellers in the United States, on Tuesday unveiled a test programme called Prime Wardrobe. Part of the Amazon Prime shopping club, the new feature will allow members to order three or more items without paying for them up front.

Customers will have a week after receiving their shipment to decide which items they want to buy and which they want to return before being charged.

It is the latest foray by Amazon into apparel and groceries, categories that have been slower to shift online. Last week Amazon said it would buy grocer Whole Foods Market Inc (WFM.O) for $13.7 billion, an aggressive step into the brick-and-mortar retail world and potentially a strategy for getting products to urban customers' doorsteps faster.

Prime Wardrobe represents another way Amazon is encouraging people to sign up for Prime, its $99-per-year programme that includes two-day shipping and streaming video. The company has found that assuming these extra costs is worth it because Prime members buy more goods, more often on Amazon.

Surging apparel sales are already helping Amazon challenge Macy's Inc (M.N) as the dominant retailer in the category. Prime Wardrobe may add further pressure.

"If I were Macy's, I'd be scared by this," said Morningstar analyst Bridget Weishaar. "Amazon is offering a very convenient way to avoid going to stores," adding that experience-driven millennials are happy to skip the trip.

The Prime Wardrobe programme includes more than a million items from shoes to accessories and clothing. Shoppers receive a 20 percent discount when they keep five or more items. Items are shipped in a resealable box with a prepaid label for returns.

Brands include Calvin Klein, Hugo Boss, Adidas, Levi's, and possibly Amazon's private-label clothing - and the Prime Wardrobe programme may be key for growing shoppers' awareness of this, Weishaar said.

The programme is perhaps a play by Amazon for data, too. Like Amazon's voice-controlled camera, the Echo Look, and an accompanying app that recommends which of two outfits is best, Prime Wardrobe has the potential to offer the retailer insights on which fits and styles shoppers prefer.

The service is similar to a number of "try-before-you-buy" services including Stitch Fix and Trunk Club, which is part of Nordstrom Inc (JWN.N).

Reporting by Narottam Medhora in Bengaluru and Jeffrey Dastin in San Francisco; Editing by Leslie Adler

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