Amazon may catch up to eBay when it comes to offering shoppers top brands in clothing, an especially challenging category for online merchants. Amazon is in talks with major retailers to bring brands to its marketplace in a special arrangement, according to the Wall Street Journal. However, Amazon.com isn’t talking – spokesperson Erik Fairleigh told EcommerceBytes, “We don’t comment on rumors and speculations.”
The retailers mentioned include Abercrombie & Fitch and Neiman Marcus.
The Journal said these retail listings on Amazon would link directly to the retailers’ own websites, but would be eligible for Amazon Prime free shipping. “The arrangement would generate traffic for the retailers, while providing Amazon with more customer data and a new enticement for its Prime shipping program as it plans to raise rates,” the newspaper explained. It also said the deal would help fill voids in its offerings.
While it might surprise many people, retailers can already advertise items on Amazon in a listing format that clicks through to their own websites thanks to Product Ads. The only difference between a “real” Amazon.com detail page and a Buy Box placement is that the orange button on the listing ad says “Visit this Site” instead of “Add to Cart.”
Product Ads aren’t new – they have been visible on search results pages but displayed in a separate section linking directly to the advertiser’s external site. But for some time now, Amazon has offered Product Ads in a listing format, with very little to identify that the item is an advertisement rather than an item available from Amazon or an Amazon seller. Mercent explained the ads in this video posted on YouTube in late 2012.
Why would Amazon run ads that look like listings? When encountering the listings, shoppers will see a link to more information called “Product Ads from External Websites” where it explains: “We are bringing you these links to products from other websites in order to provide you with greater product selection and more price information in one place. We want Amazon.com to be the place you think of to find, discover, and buy anything online.”
That last line sums up Amazon’s strategy and supports the thesis that more shoppers are starting their shopping searches on Amazon rather than on search engines like Google, and that Amazon is actively encouraging that behavior. In an article in the Dallas News, former ToysRUs CEO Gerald Storch said amassing some of the best-known retailers under Amazon’s umbrella could make it more of a competitor to Google: “It’s a battle about who is going to control access to the customer, because shoppers may instead come to search for brands on Amazon,” Storch told the paper.
Scott Galloway, professor at NYU Stern School of Business and author of the Digital IQ Index, recently explained the complicated relationship luxury brands have with Amazon and actually called the company “the Tony Soprano of ecommerce.”
“They’re showing up and saying, do you want protection for your brand, and if the answer is yes, you need to pay us one way or the other.” Once a brand starts advertising on Amazon, the site cleans up the listings for that brand, and the discounting magically goes away, Galloway said.
Of course, many brands may feel the same about eBay, which has courted major brands and retailers in recent years. In an email sent to shoppers last week, it advertised a “Lighten Up” sale on its eBay Fashion portal showcasing jackets, coats and blazers from Wilsons Leather, Ralph Lauren and Calvin Klein offered for sale on eBay by major retailers, from the likes of Aeropostale and Target.
eBay won support of major brands and retailers in part through its eBay Enterprise division, formerly GSI Commerce, and by relentlessly telling retailers it does not compete with them, an obvious reference to Amazon, which does offer its own goods for sale competing directly with retailers.