|Amazon has its hands in many businesses, and now it’s getting ready to have a hand in the fashion industry, too / Photo by: Joe Mabel via Wikimedia Commons|
Amazon has its hands in many businesses, and now it’s getting ready to have a hand in the fashion industry, too.
After Amazon acquired Shopbop and Zappos in 2006 and 2009 respectively, Amazon realized that they could continue to disrupt the fashion industry and invest in it to expand their third-party marketplace. The US fashion market will be challenging to enter for Bezos and Amazon, but it’s important to note that Amazon is an e-commerce company first, and the fashion industry has been thriving in the online market.
It would be a great opportunity for Amazon to continue investing in a service for their fashion shoppers, especially since Amazon has since become the number one shopping destination for online shoppers. From 2017’s 50%, the rate of online shoppers climbed to 61% in 2018.
Fashion by the Numbers
Technically, Amazon’s hand in the fashion industry was driven by brands trusting them to sell their products online. Just like Nike did with its relationship with Amazon in 2017. According to business news website Forbes, that Nike deal was eventually ended by Nike itself, after realizing that their products were being counterfeited and taken advantage of by third-party sellers.
Even then, Amazon is convinced that this is but a minor setback. According to James Thomson, a partner of Amazon in Buy Box Experts, Amazon already has standing with most major brands. Although Nike pulled the plug on the partnership, there are still enough brands on the platform to attract consumers.
“There are still 40,000 Nike listings and some 3,000 sellers of Nike on Amazon. The fact that Nike is pulling out a couple of hundred SKUs is a non-issue. Any brand with any level of popularity is already on Amazon,” Thomson said.
Thomson is right. Currently, 87% of Amazon’s third-party marketplace are for fashion listings, and these go under Amazon Fashion, Prime Wardrobe, a styling-service, and Personal Shopper by Prime Wardrobe.
They even followed where the trend pointed, setting up The Drop in the process, which features a curated "limited-edition streetwear style." The Drop also works closely with influencers who can then design their own collections and sell them exclusively on Amazon.
Now with more of Amazon’s intentions for the fashion industry coming out in the open, Amazon has since garnered $30 billion in sales, as reported by Wells Fargo and Morgan Stanley.
However, the big beauty names still haven’t quite worked together with Amazon yet but rumor has it that Amazon will be working to add more “luxury” brands into its catalog. Nothing is sure yet, but some leaked news on WWD said that the brands are ready enough to enter into Amazon’s business model.
According to the news, these 12 luxury brands are “stepping forward to take the plunge, with fulfillment supported by a dedicated warehouse being built in Arizona and a $100 million marketing campaign.”
|Technically, Amazon’s hand in the fashion industry was driven by brands trusting them to sell their products online. Just like Nike did with its relationship with Amazon in 2017 / Photo by: University of the Fraser Valley via Wikimedia Commons|
More Luxury to Come
For now, while the WWD leaked news is yet to be confirmed, Business Insider reports that if Amazon will have more luxury brands in the store and a platform for them, it is likely that the decisions will still be made by the brand and not Amazon.
The business website reported that the new platform for luxury brands needs to emulate the same luxury they are known for, and so, the brands will decide what will go on the platform from the way it looks to what items go on sale. Amazon could really enter the fashion industry in a meaningful way if this pans out, but since they declined to confirm or deny anything, everything is still mostly up in the air.
If Amazon does manage to get this in the bag, they could really elevate their standing in the fashion world. People are now going to turn to them for brands like Louis Vuitton, Chanel, Hermès, Gucci, Burberry, and many others. These are the brands that will really pull people in to take Amazon a little more seriously in their fashion industry endeavors.
The truth is that while Amazon is lauded to be the number one destination for clothes and apparel, they do not enter the radar when people talk about fashion. Amazon is well and good when it comes to consumables and replenishables, says Thomson, but not necessarily for more fashionable pieces, the kind that people buy to actually flaunt.
It doesn’t help that Amazon’s record with counterfeit products -- already evidenced in Nike’s pull-out from the deal -- has essentially plastered a warning sign on them for all luxury brands to see. Nike has had to deal with it and as a result, had to back out of the deal to protect their product, big fashion brands are afraid the same thing might happen to them.
According to industry website Retail Prophet’s CEO, Doug Stephens, “Luxury has not been something they have been able to crack.”
Stephens doesn’t think Amazon will stay in that pit for very long, though, especially since Amazon has also built a reputation of having the “ability to upset any channel once they put their sites on it.”
Amazon’s plans to disrupt the fashion industry seems very serious if you take into account how much work they are putting into adding their name on the map. According to a corresponding article under Business Insider, Amazon is also thinking of adding “Making the Cut” on Amazon Prime Video.
The show will feature 12 designers and all of their looks will be easily sold to crowds around the world. Because Amazon is in on this project, the designers would have the opportunity for their winning looks to be sold on Amazon Fashion’s “Making the Cut” store.
The rest of the competition will progress as it has before, with each designer designing clothes for each round and getting eliminated through challenges. The winner will receive a $1 million grand prize.
One of the fashion experts that will be on the panel to judge the fashionable looks will be Naomi Campbell and former Vogue Paris editor-in-chief Carine Roitfeld.