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The Wall Street Journal reports that Amazon has decided to get into the intimate apparel business, pricing products in a way that will challenge the likes of Victoria's Secret.

According to the story, Amazon "plans to start selling its own line of competitively priced women’s intimate apparel on its U.S. website, according to people familiar with the matter, something that could begin in the next several weeks. It recently started selling bras for under $10 in Europe, where it uses the label Iris & Lilly.

"Amazon’s entrance into the lingerie space presents a challenge for industry stalwarts such as PVH Corp. ’s Calvin Klein and L Brands Inc. ’s Victoria’s Secret, which have built their businesses on bras that retail at around $40. Amazon, which already sells intimate apparel from several department-store brands, has a history of leveraging consumer data from its online listings and offering cut-rate prices to grab market share." In all likelihood, Amazon would be sacrificing margin to get a foothold in the market.

The Journal goes on to say that "lingerie has been among the last e-commerce holdouts because fit and comfort are often hard to assess online. But a shift in consumer preferences toward garments with more simple sizing—such as sports bras and bralettes—makes it easier for online sellers to attract buyers. Several e-commerce-driven startups use fit surveys and free returns to help lingerie shoppers make the leap."
KC's View:
To me, the instructive part of this story is the point about how Amazon uses data that it is able to gather from third-party Marketplace sales to decide what categories it can attack with its own offerings. That's something that anybody doing business with Amazon needs to think about. It isn't unique to Amazon; lots of retailers decide on private label offerings based on the categories where national brands have been successful. But when Amazon does it, the impact can be far greater because its reach and resources seem endless.