Amazon Preps High Fashion Enterprise to Get Inside Your ClosetBy: Drew Bowling - May 8, 2012
It appears that no industry is safe from the probable insurgency of Amazon. First it conquered the publishing industry, then it staked a sizable claim in the music and video industry. Following the triumph of becoming a top retailer in those fields, the New York Times says that Amazon has now set its sights on a very different market: fashion.
Amazon’s been selling threads for some time now but never before has the company looked to truly become a primary go-to retailer among fashion consumers. As if to indicate his determination to become a legitimate retailer of haute couture, Amazon CEO Jeff Bezos is pushing millions of dollars into the website’s latest large-scale project, replete with hired full-time shoe models and a highly prolific fashion photography studio.
Amazon’s been inching its way into the fashion industry for a couple of years, perhaps most notably with its acquisition of Zappos.com in 2009, but it’s never made such a concerted effort like this to woo high end fashion labels that have kept the online retailer at an arm’s distance. Bezos cites Amazon’s spin-off site for the high fashion market, MyHabit.com, which features the kind of photo spreads you’d be likely to see in GQ or Elle than with the traditional Amazon’s stock image-style with plain white backgrounds, as the beacon guiding the company’s direction.
However, despite Amazon’s prior business model of keeping prices persistently low enough to frustrate competitors, even to Amazon’s own detriment (the company loses millions of dollars a year thanks to its free shipping offer), Bezos says that Amazon’s going to change its tune with this latest enterprise. “There’s a sophisticated markdown cadence in the fashion industry that we think makes sense and we’re basically following that established approach,” he told the Times.
So what does Bezos have to gain with establishing Amazon as a proprietor of designer digs?
Amazon’s decision to go after high fashion is about plain economics. Because Amazon’s costs are about the same whether it is shipping a $10 book or a $1,000 skirt, “gross profit dollars per unit will be much higher on a fashion item,” Mr. Bezos said, and it already makes money on fashion. While its MyHabit site, started last year, uses a flash-sale model to compete with Gilt Groupe, Mr. Bezos says the company’s new effort is not about selling clothes at deep discounts but at prices that ensure that “the designer brands are happy.”
Ah. After all these years, Amazon appears to finally be working on a solution to not hemorrhage so much money from its free shipping offers.
At this rate, Amazon is steadily working at becoming the premiere one-stop shopping destination of the 21st century. I imagine a future in which we browse for suits and sea food and songs alike on Amazon’s pages – all through a Kindle device, of course.