Amazon’s Fashion “Nuke”

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\"RRSeveral years ago, Jeff Bezos said that Amazon had to figure out how to get their fashion business “right.”  Subsequently, they began building an organization of seasoned fashion professionals who now believe it’s time for Amazon’s “coming out party.” So, with a one-two punch, they’ve quietly launched seven private apparel brands and a daily live streaming fashion show called “Style Code Live.” And these are just the most recent initiatives.

The entire fashion industry, including retailers, has been shoveling its brands and styles through Amazon’s giant distribution platform since its inception. Amazon has been able to compile an informational “nuclear” database by finitely tracking all of the gazillions of transactions that have taken place online.  In real time they know what’s hot and what’s not.  They can then quickly find the “white spaces,” styles, price points not being served, as well as underserved segments. So why not build a vertically integrated fashion marketplace that Amazon can own?  Why not, then, push every third-party fashion retailer and brand operating on Amazon’s site into hysteria? Or should I say threaten them even beyond their already hysterical fears.

Once again, I remind all of us that our over-stuffed world does not need another frock, store or brand.  However, Amazon’s intelligence process provides the advantage of identifying opportunity niches across the entire spectrum which they can quickly fill, therefore stealing share of consumers’ wallets from the very brands and retailers who are paying Amazon to sell their wares through its marketplace in the first place. And, by the way, don’t forget the fact that Amazon’s share stealing is also made easier due to the fact that they still don’t have to make a profit.

The fox in the hen house comes to mind. Or worse, as one CEO from a major department store said, “It’s like doing business with the devil.”

Amazon’s private brands are Society New York, Lark & Ro, Scout + Ro, Franklin & Freeman, Franklin Tailored, James & Erin, and North Eleven. The lines include apparel and accessories for men, women and children.  Quartz reported that the seven brands will include 1800 different fashion items. Millennial consumers comprise the primary customer segments.

The “quiet” rollout was likely a purposeful decision to offset a potential turn-off among young consumers who might not view Amazon fashion as “cool.” In my opinion, that issue is a moot point. We are already observing that brands no longer have the power they once had over young consumers with such unlimited and instantaneous access to more new stuff 24/7.

However, the quiet rollout of their brands is only one of Amazon’s nuclear bombs being dropped on the apparel industry.  Cowen & Co. investment bank says Amazon’s total apparel business is expected to grow from five percent of the total U.S. apparel market in 2015 to 14 percent by 2020.  Amazon would then replace Macy’s as the largest domestic apparel retailer. The estimate predicts Amazon’s apparel sales growing from $16 billion in 2015 to $52 billion in 2020. According to Cowen, Amazon already has 34 percent more apparel buyers than Target and two percent more than Walmart.

Hysteria is an understatement.

Fashion-Meets-Entertainment Code

What better way is there to establish Amazon’s fashion cred and connect with must-have millennials than to stage live video-streaming, 30-minute fashion shows, five days a week at 9:00 pm?  It’s also a great platform for featuring their private brands.  Style Code Live will be hosted by reality and fashion show personalities. The debut show was hosted by Lyndsey Rodrigues, Rachel Smith and Frankie Grande.  Future guests will include fashion bloggers and YouTube stars like Tati Westbrook, and upcoming shows will feature pop star Meghan Trainor and actor Keri Russell. The show also provides a live-chat function for viewers to interact with the hosts who will offer fashion and makeup advice. While viewers cannot purchase directly from the video, they can buy the corresponding products from a carousel under the video player.

An Amazon spokeswoman commented about Style Code’s premiere show in WWD, “The chat was very lively with lots of positive feedback and useful comments about the topics being discussed. Our customers love fashion and have wanted a place to keep up with trends, get insider style tips, and discover new products and brands. We created ‘Style Code Live’ for them, and the community aspect is a huge part of it. We want our audience to be really involved – being live gives us that opportunity; it’s fun and our viewers have a lot to contribute to the show.”

Up Next?

Let’s hear it one more time. Amazon opening bookstores was a first step into an omnichannel model, and apparel “entertainment centers” could be the next step.  Why not have social gathering locations outfitted with interactive live-chat streaming fashion videos, music, perhaps coffee and crumpets, and oh, yes, apparel samples according to local fashion preferences, complete with virtual fashion mirrors to download styles onto one’s body to check out the look?  Of course Internet screens would be available to order for same-day delivery. And, on and on, whatever the creative minds at Amazon can imagine.

It’s not a question of “if” folks. It’s just a question of when.



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