Expansion continues to be the theme at Amazon.
The company updated its mobile app to support international shopping from its U.S. marketplace, and cut a new deal that turns electronics retail competitor Best Buy into a brick-and-mortar partner.
Founder and chief executive officer Jeff Bezos also released his annual letter to shareholders, revealing that the 13-year-old Amazon Prime program has more than 100 million members globally and giving a shout out to the firm’s growing fashion business.
“Amazon has become the destination for tens of millions of customers to shop for fashion,” Bezos said. “In 2017, we introduced our first fashion-oriented Prime benefit, Prime Wardrobe — a new service that brings the fitting room directly to the homes of Prime members so they can try on the latest styles before they buy. We introduced Nike and Ugg on Amazon along with new celebrity collections by Drew Barrymore and Dwyane Wade, as well as dozens of new private brands, like Goodthreads and Core10.”
He also touted the company’s work with Calvin Klein on its “interactive shopping experience” as well as the Merch by Amazon program, which lets designers upload artwork and set their royalty rate while the web giant handles everything else, from production to shipping to customer care.
While Amazon adds to its merchandise mix, including in fashion, it is also reaching out to shoppers in new ways.
Amazon said its app was updated with new languages — Spanish, English, Simplified Chinese, Brazilian Portuguese and German — and new features that show users worldwide, which products are eligible for delivery to their location. The changes, revealed late Tuesday night, also include pricing in as many as 25 currencies, shipping costs and import duty estimates.
With its primary business in the U.S., Amazon previously catered to just a limited set of markets beyond its home turf — such as Australia, Singapore and countries in Western Europe and the Middle East. Indeed, it already offers international shipping to some areas for various goods from its U.S. web site. But the new features aim to make international shopping more convenient and to boost its appeal worldwide.
According to Samir Kumar, vice president of Amazon’s exports and expansion group, the new services cover more than 45 million products for 100-plus countries around the world. The company pledges to take on the courier details and customs clearance, and it plans to add more languages and currencies over time.
Naturally, the e-tailer wants to extend its reach, and to do so, it appears to be moving in stages. That should be no surprise. Global commerce can be a complex matter, even for an e-commerce giant. For instance, Brazil’s 200 million-plus consumers makes it an appealing target for the retail sector, but navigating its labyrinth of import and customs rules can be confounding and expensive. Certainly, the broader service areas will incur extra fees in some cases, along with potentially longer wait times for delivery. But free shipping for large orders could take some of that edge off.
Domestically, Amazon increased its physical footprint, thanks to a new, multiyear partnership with Best Buy.
The deal — which exclusively stocks Best Buy stores with new Fire TV-powered televisions — may make for uncomfortable bedfellows, given their history as competing electronics purveyors. Best Buy stocks Amazon Kindles and other devices, but by adding the new breed of Alexa voice-equipped Fire TV televisions to the mix, the chain effectively gives its competitor a major brick-and-mortar customer touchpoint.
“From Amazon’s perspective, it makes total sense that it would want to strike partnerships with folks that have brick-and-mortar locations, where its products can be showcased,” said Ken Cassar, principal analyst for Slice Intelligence. “The interesting part of the deal is how Best Buy sees it. There’s undoubtedly debate within Best Buy about whether they’re making a deal with the devil or whether they’re making a smart move, using it to drive more customer traffic.” Investors seem to fall into the latter camp: Best Buy’s stock jumped 3.6 percent to $75.40 on Wednesday. Amazon stock also marched higher, gaining 1.6 percent to $1,527.84.
This summer, Best Buy plans to carry 10 Fire TV models in the U.S., with Canada to follow later in the year. The new televisions will be built by Toshiba and Insignia, Best Buy’s house brand.