Amazon wants to be your everything. The tech giant has a reputation for diving into non-related sectors to boost its e-commerce footprint. Food (groceries and deliveries) was the last sector it was rumored to expand in. But now, word around the community suggests that the brand is getting into fashion.
“For Amazon, we know our customers love brands, many of the brands in this room…and that’s where the lion’s share of our business comes from,” said Jeff Yurcisin, vice president of clothing at Amazon Fashion and CEO of Amazon’s Shopbop unit, at the WWD Apparel and Retail CEO Summit. “When we see gaps, when certain brands have actually decided for their own reasons not to sell with us, our customer still wants a product like that.”
Based on Yurcisin’s explanation, Amazon isn’t gearing up to be the next top luxury brand. Instead, it plans to dive into the crowded mid-tier clothing category. The business wouldn’t be doing this if it didn’t see a need to fill, and at the moment there is a high demand for readily available, everyday apparel. The group is likely to take a very cautious approach into the industry, so don’t expect to see Jeff Bezos walking the runway anytime soon.
Evolution of Amazon Fashion
Before the announcement, the group first tested the waters via Amazon Fashion. Through the program, it formed close partnerships with several brands, including Calvin Klein and Levi’s. Ultimately, the medium was a way for the company to persuade clothing lines to sell their products on the website. Many were apprehensive with the pricing models. Like its partners, Amazon was out to make a profit from the agreements, which often led to low margins and aggressive cost cutting. Such practices pushed many big names away from the site. In the end, what buyers were left with were third-party merchants selling marked up retail. Fashion brands still sold their products on the platform, but on limited releases (hence the gap that Yurcisin was referring to).
Amazon Fashion is still going strong, but it could benefit from better partnership schemes. Unfortunately, the company isn’t willing to compromise and would rather do the unthinkable: private labeling.
Comply or Compete
What happens to brands that aren’t willing to play nice with Amazon? Technically, nothing. Businesses aren’t forced to sell anything on the website. The e-commerce heavy-hitter will sell its own versions of the products that people love buying to make up for the demand. As a result, the group walks away with more money, leaving fashion brands that refuse to comply empty-handed.
It sounds cruel but that’s just the way the site works. Strangely, it doesn’t want to push all of the clothing companies away. That would also be bad for the platform, simply because no one wants to fill their closet with Amazon labels. A few shirts here and there, a batch of running socks and an ugly Christmas sweater is probably where most people will draw the line when it comes to committing to Amazon’s secondary clothing brand.