Today, Amazon announced their entry into the monobrand e-tailing business with an online store dedicated to Derek Lam’s 10 Crosby contemporary line.
You may recall that on May 7th, 2012, Amazon’s Jeff Bezos proclaimed, “It’s Day 1 in the category,” in reference to Amazon’s foray into the fashion world. Since that time, a good bit has been written about the impact this would have on the fashion industry. The big question on everyone’s mind was: Would Amazon be as disruptive to the fashion world as it has been to books, DVD’s, music and other products?
Amazon executives are well versed on the company’s mantra of eliminating costs and waste in order to offer consumers lower prices. But when it comes to fashion, that mantra has been tested. In October, Cathy Beaudoin, President, Amazon Fashion stated on ft.com: “Price is not really a differentiator for us . . . We maintain the pricing integrity that our brands have established and we don’t break from that.”
At Amazon, it’s all about Amazon. In an article on WWD regarding the Derek Lam line, Beaudion stated: “When we think of what’s next, we think of ourselves. We want to raise our own bar for presentation and innovation around the shopping experience, and partnerships like this one that elevate the whole experience give her content that she might not have [received] otherwise, and immerse and shop the brand in a way that she can’t today.”
Amazon and Beaudoin are in discussions with bigger names including Ralph Lauren, Burberry, and Gucci and Prada from Italy. German fashion group Hugo Boss says Amazon’s power cannot be ignored, but adds that many Hugo Boss products on Amazon have not been approved for sale on the site. Amazon, which gets 40 percent of its revenue from 3rd party sales, continues to deal with complaints from Hugo Boss and Guess over the practice of unauthorized sales.
Another challenge Amazon will face, similar to brick and mortar stores, is the acceptance of retailer/designer collaborations (e-tailer in this case). The success or failure of these collaborations is dependent on three critical, interdependent elements: the designer, the retailer and most importantly the customer. In an article on Forbes.com entitled Retailer/Designer Collaborations – The Missing Link, Greg Petro, CEO of First Insight stated, “The solution is for retailers and brands to understand whether their target consumers will buy the proposed collections through the proposed channel. This involves a deep understanding of consumer value at an individual brand and product level, by retailer. The good news is that consumers want to be involved, and modern technology tools make this possible."
Amazon will not be immune to the factors that can make or break a successful collaboration between retailers and designers.
In his four part series on Forbes.com last year, “Can Amazon Take on Fashion?”, Greg Petro discussed in detail the challenges Amazon would face when entering the fashion world. In addition, opportunities and solutions were presented for retailers and brands to create exclusive assortments in order to avoid commoditization and instead present a truly unique product.
Time will tell if Amazon will reap big rewards with its fashion foray. But confidence in their success is not an issue. Closing the article on WWD, Beaudoin concluded, “It’s a 10 Crosby destination on Amazon. It’s a little boutique that’s integrated into our store like a shop within a shop. It’s a model for how we want to partner with brands going forward. It’s our maiden voyage with this brand, and we’re all really [pleased] about it. It’s feeling really good.”
With New York Fashion Week drawing to a close, followers of the event were able to get a new look into just how technology is changing fashion. As First Insight blogged a few months ago, designers like Norma Kamali were starting to stream their shows live via the web. As the month-long runway circuit progresses, the fashion industry is seeing more and more designers jump on this social media trend and others. Now listed among the live streaming designers are Giorgio Armani, Ralph Lauren, and Dolce & Gabbana. During the London Fashion Week, Burberry is taking their live streaming one step further: On February 23, the designer will webcast its show at events in 3D!
In a recent LA Times blog post, “Fashion Diary: Technology meets Fashion Week,” the comment is made, “The only thing left to figure out will be how to monetize the shows instantly.” Designers typically see a six month lag between runway and retail, but technology is helping them to find ways around this problem. As a different article from Women’s Wear Daily [log-in required] points out, some designers are already finding ways to do this, while at the same time taking a bite out the knockoff business. Norma Kamali and Cynthia Rowley, among a few others, have started selling their samples from the show immediately after. Rowley also had limited editions of dresses, skirts, tops, and handbags ready for sale after the show. Designers feel that this is a way to take ownership of their designs before the knockoffs can be produced. But, designers are also seeing this as a way to keep up the “fast fashion” retailers like H&M and Zara.
The WWD article continues, “French designer Roland Mouret is taking it a step further: pre-selling his RM line to retailers before showing it on the runway, so that his styles will hit stores just a month after his show.”
It is exciting for designers, retailers, and consumers that fashion is getting faster. As the world continues down a path of instant gratification, the faster fashion can be, the better it is. But in the rush, we lose the 6 month long feedback that merchants have to gauge the marketplace demand for the items. Often times, retailers are able to adjust their buys or negotiate prices closer to the delivery date. Merchants use feedback sources to fine-tune their buys along the way. Without the long lead times, retailers need a faster, more efficient way to gauge marketplace sentiment. As the lead time shortens, the stakes get higher.