Dive Brief:

• Boxed has partnered with New York-based department store Century 21 to debut an assortment of beauty and apparel items, the online grocer told Grocery Dive in an email. 
• This is the first time Boxed has offered clothing and cosmetics. The lineup will include brands such as Bare Minerals, Calvin Klein, Polo Ralph Lauren, Adidas and Ray-Ban. 
• "Century 21 remains a leader in high-end, off-price fashion retail," said Kelly Welsh, category manager at Boxed, in a statement. "By partnering with Century 21, the iconic New York City retailer, Boxed is able to expand our everyday assortment of household essentials to include top designer brands at incredibly low prices."

Dive Insight:

Boxed is yet another grocery retailer dipping its toes into the apparel and beauty industry, but the company's partnership with a respected, high-traffic department store could give it the leverage it needs to stand out from competitors. According to Boxed's website, the initial inventory available from Century 21 is priced anywhere from 45% to 73% lower than typical retail prices.

As an online grocer, Boxed doesn't have the steep investments associated with a brick-and-mortar store. But it still has to fight for customer loyalty against a growing number of online-only retailers as well as Amazon and wholesaler Costco. In adding trusted beauty and clothing brands to its assortment, Boxed will provide another layer of convenience for shoppers. In addition, Century 21's business can help Boxed reach a new set of value-driven customers. 

Retailers show continued interest in expanding into clothing, health and beauty as well as food. Last year, Kroger announced the launch of its private-label clothing line, Dip. Since then, Hy-Vee made Joe Fresh its preferred apparel brand. Walmart recently released its own skin care line while Target has introduced new clothing collaborations. Both retailers are also doubling down on grocery efforts, with Target most recently announcing a new private label line, Good & Gather.

Unlike grocery, which has about a 2% profit margin, apparel brings in margins as high as 13%, according to industry analysts that spoke to the San Francisco Chronicle. And even though brick-and-mortar retailers are struggling, e-commerce companies selling apparel and beauty products continue to thrive. 

Century 21 benefits from the partnership with Boxed as well. The 58-year-old department store has been trying to stay relevant, and Boxed gives its e-commerce presence a much-needed boost. The retailer's latest initiatives include a "real New Yorkers" spring campaign, a concept store expansion in Staten Island and a collaboration with streetwear brand FUBU.

Retail partnerships aren't new to Boxed. The online grocer joined forces with Lidl earlier this year for an online ordering and fulfillment pilot. Through these partnerships, Boxed can expand its merchandise portfolio and reach new shoppers, and its warehouse technology serves as a back-end service for other retailers who may not want to invest in their own infrastructure.