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How Does Body Labs Fit into Amazon’s Strategy?

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Amazon may have paid more than $50 million for Body Labs

Amazon (AMZN) has quietly acquired Body Labs, a 3D (three-dimensional) body modeling startup, according to TechCrunch. The transaction may have cost Amazon as much as $50.0 million.

Body Labs specializes in 3D body scanning and modeling technology capable of generating accurate 3D body scans. Apparel retailers use Body Labs’ model technology to improve size recommendations for customers, which in turn helps reduce returns.

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Potential boost to Amazon’s fashion push

It may not seem obvious where Body Labs could fit into Amazon’s strategy until you see the company’s growing fashion ambitions. Amazon is eager to grow its influence in the multi-billion-dollar fashion industry and has taken a number of steps to achieve that goal.

In June 2017, Amazon launched a service called Prime Wardrobe, a way for customers to try on garments before they decide which ones they want to purchase. The launch of Prime Wardrobe marked another effort by Amazon to try to make people more confident buying clothes online.

In April 2017, Amazon introduced Echo Look, another version of its Echo line of smart speakers. Amazon positioned Echo Look as an artificial stylist that could iron out the stress of purchasing clothes on the Internet.

Simplifying online fashion shopping

Body Labs could fit into Amazon’s goal to simplify online fashion shopping.

Although Amazon is the preferred online fashion retailer for younger people, as you can see in the above chart, most fashion sales are still taking place offline. That’s to the advantage of traditional store operators Macy’s (M), Gap (GPS), and Nordstrom (JWN). Body Labs’ modeling technology could help Amazon increase its share of fashion sales. Walmart (WMT) acquired online clothing retailer Bonobos earlier this year for $310.0 million to bolster its play in the fashion industry.

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