The world's largest Internet retailer Amazon.com, Inc. (AMZN) recently announced that it would close its fashion website endless.com from September 27, 2012. The company intends to consolidate endless.com into Amazon.com/Fashion.
Amazon has increased focus on its new, upgraded apparel, shoes and accessories section. Therefore, in addition to the launch of a more diverse and appealing product range, Amazon will bring endless.com’s popular features to enhance the shopping experience.
Amazon started endless.com in December 2006, mainly specializing in women's shoes and handbags. Following the success of this site, Amazon launched other websites such as Shopbop and Javari. It also acquired another ecommerce startup called Zappos for $880.0 million in 2009.
This shift will increase Amazon’s product offerings from mere women's shoes and handbags, which were sold through endless, to apparel, handbags, jewelry, watches and shoes. The online buyers will largely benefit, as Amazon will offer more brands under one roof.
Amazon saw 100.4 million average monthly unique visitors in the second quarter of fiscal 2012 in the U.S. alone, double the number of visits to Apple’s (AAPL) and Wal-Mart’s (WMT) stores. Presently, it is the most visited website in America.
According to emarketer, U.S. retail ecommerce sales are poised to grow 15.4% to $224.2 billion in 2012, jumping to $361.9 billion by 2016. Although Amazon rival eBay (EBAY), which has been growing steadily over the last couple of years, should also benefit from the strong growth prospects in the segment, Amazon’s superior strategy could help it maintain its lead.
Amazon is one of the leading players in the extremely fast-growing retail ecommerce market. While the strong growth prospects are making the market more competitive, Amazon continues to maintain and even increase its share on the back of its consistent and reliable services. Amazon’s scale of offerings, its broad reach and platform approach are the keys to its success.
Amazon’s second quarter results were more or less within expectations. Reported revenue of $12.83 billion was down 2.7% sequentially and up 29.5% from the year-ago quarter. This was better than the guidance for the quarter of $11.9-13.3 billion (down 4.4% sequentially, or up 27.1% year over year at the mid-point) and in-line with consensus expectations. Year-over-year revenue growth was 32%, excluding an unfavorable currency impact.
Currently, Amazon has a Zacks #3 Rank, which implies a Hold rating in the near term.
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