Market Overview

How Amazon Is Trying To Change The Way You Shop

How Amazon Is Trying To Change The Way You Shop, Inc. (NASDAQ: AMZN)'s pop-up stores in conjunction with Calvin Klein are up and running, but some on Wall Street aren't convinced they represent the future of shopping. 

The Analyst

Morgan Stanley's Brian Nowak maintains an Overweight rating on Amazon's stock with an unchanged $1,250 price target.

The Thesis

The "Calvin Klein X Amazon Fashion" holiday retail experience consists of pop-up stores in which consumers can interact with Amazon Echo devices that answer questions about the exclusive underwear products.

Perhaps the most notable takeaway from the partnership is the ability to personalize the underwear, which forces customers to "get off the couch and go to the store," Nowak said in a Sunday note. (See Nowak's track record here.)

In addition, consumers need to use their Amazon app to finalize a transaction, which shows the online giant's attempt to "change consumer behavior/expectations in the offline world."

Despite the use of new technologies, the analyst's firsthand checks at a store in New York City's SoHo found the experience to be as if it is "operated by a brick & mortar retailer, not a technology company." In addition, the use of Amazon's Echo devices "felt a bit forced," and the lack of any clear signage of pricing provided a missed opportunity for consumers who simply don't want to scan items with their phones, Nowak said. 

"While the store has compelling characteristics (dynamic pricing, free customization, exclusive merchandise), the 'tech retail' experience and Echo integration still did not feel entirely seamless," Nowak said. 

Price Action

Shares of Amazon were trading down about 1 percent at the time of publication. 

Related Links:

Are Restaurants Safe From The Amazon Effect?

Retail Watcher: Department Stores Aren't Dead Yet, But Face 'Assault' From Many Angles

Latest Ratings for AMZN

Jul 2020Canaccord GenuityMaintainsBuy
Jul 2020Credit SuisseMaintainsOutperform
Jul 2020Morgan StanleyMaintainsOverweight

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