retail news in context, analysis with attitude

The Wall Street Journal reports that in view of Amazon's efforts to make itself a destination for online fashion shoppers, Gap CEO Art Peck told investors this week that he would consider selling his company's clothing "on Amazon or other third parties in the U.S."

The reason? "To not be considering Amazon and others would be in my view delusional," he said. "We are always considering all of our opportunities beyond our traditional mix of channels and stores.”

Peck conceded that Amazon is projected to become the largest US apparel retailer by next year. “To not acknowledge that and what it means to our strategy would be to have our head in the sand, and we do not have our head in the sand,” he said.

The Journal writes that "Amazon has courted apparel brands for years and has started to lure some department store staples to its site, including Calvin Klein, Lacoste and Levi Strauss. But Gap is among the chains that have shunned the online retailer and it has largely focused on selling jeans, khakis and button-downs through a fleet of more than 3,500 stores and its own websites."
KC's View:
There's no question that doing business on Amazon can be problematic for companies like Gap, which will inevitably find that Amazon will have access to its shopper data and will be able to more effectively to compete with them. But unlike what happened to companies like Toys R Us and Borders, which got into bed with Amazon long before there was any real understanding of how powerful a platform Amazon had developed, Gap will be doing it with eyes wide open.

If companies like Gap want to be relevant to its target audience, it may have little choice but to do business on Amazon. To do otherwise may well be to keep its head in the sand.