KeyBanc: Amazon's New Stylist Initiative Shows 'Intensification' Of Apparel Efforts

Amazon.com, Inc. AMZN's new service of offering women customers a curated set of clothing and accessory options represents an "intensification" of the e-commerce company's apparel push, according to KeyBanc Capital Markets. 

The Analyst

Edward Yruma maintains an Overweight rating on Amazon with an unchanged $2,100 price target. 

The Thesis

Amazon is testing a new service in which women customers build a profile for fit, aesthetic, brand preference and price sensitivity, Yruma said in a Sunday note. 

A live stylist will leverage Amazon's apparel offering and contribute a "human element" to preview a set of apparel options, the analyst said. Customers will then approve a final order for shipment that comes backed by Amazon's standard 30-day apparel return policy.

It is not yet clear how much of the process is data-driven and how much is curated by a human stylist, but it is likely Amazon will focus on the artificial intelligence aspect, Yruma said. While it's still in the early testing stages the product "looks robust" so far, he said. 

Prior to the stylist launch, Amazon's apparel offering was lackluster, and this initiative brings improved photography and "storytelling," the analyst said. 

Stitch Fix Inc SFIX could perform well against Amazon in the stylist category given its large set of data, advanced analytics and extensive stylist base, Yruma said.

The companies most at risk from Amazon are struggling specialty mall and department store competitors, he said. 

Price Action

Amazon shares were trading down slightly at $1,842.78 at the time of publication Monday, while Stitch Fix shares were falling 2.72 percent to $26.43. 

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Photo courtesy of Amazon.