The fashion industry has been crushed by the coronavirus shutdowns. Through the first seven months of the year, no sector in U.S. retail has been as hard hit as clothing and clothing accessories, declining 36.5%. Even restaurants and food services did better, dropping only 21.4%.
Look across the list of retailers going bankrupt this year and you’ll find fashion brands (Ascena Retail
But while fashion retailers are dropping like flies, there is Amazon turning everybody else’s misfortune into its big opportunity.
Before the pandemic, Amazon already had positioned itself well in clothing retail, with a strong third-party network of fashion brands in its marketplace, some 80 private-label fashion brands, including Amazon Basics and Goodthreads, a try-before-you-buy Prime Wardrobe offer, a nascent fashion influencer program, and its influencer-designed marketplace of street fashion, The Drop, available exclusively in a 30-hour window.
Now those programs and more are on steroids, ready to take market share in a fashion marketplace reeling from the impact of coronavirus retail shutdowns and consumers’ changing shopping habits as they spend more time at home and away from stores.
Evolution of Amazon and fashion
For all of its remarkable success, Amazon has been less remarkable selling fashion, as distinguished from the more basic and functional apparel and footwear category.
In apparel and footwear, Amazon is now the nation’s number one retailer, according to Wells Fargo, which estimated its sales reached $30 billion last year. However, Amazon doesn’t report apparel sales.
But while apparel and footwear makes up fashion, not all apparel and footwear is fashion.
“Fashion is about storytelling through clothing; it’s about the stories behind them and the ones you create around them. It’s a cultural influence, backstory or intellectual touchpoint that you can trace back to what you’re wearing,” freelance fashion stylist Shiona Turini says.
In terms of Maslow’s Hierarchy of Needs, fashion is at its pinnacle of self-actualization and esteem, whereas apparel and footwear are at the bottom. Amazon has done quite well satisfying consumers’ basic apparel needs. Now it is trying to climb up the hierarchy from clothing to fashion.
Cracking the code in fashion
In the early days, Amazon approached clothing retail from a practical perspective, with its algorithms keyed to large numbers of reviews.
“Amazon created an amazing shopping search engine,” says Laura Meyer, founder and CEO of Envision Horizons, a company that helps brands build business on Amazon.
“If you look at other categories, such as household items or even beauty products, the algorithm rewards older listings because of the reviews. When you look at fashion, the need for a shopping search engine is the exact opposite. It’s not what listings have this evergreen data, but listings that are new and trending.”
That makes Amazon a great place to shop for classic jeans, jackets, shirts, and pants or, in terms from its early days as a bookseller, publishers’ backlist titles. But for fashion, the big opportunity is the new trending releases.
“In order to be successful in fashion, Amazon needs to put something in front of or go beyond the search bar. Curation is key,” Meyer believes.
One answer is Amazon’s Influencer Program quietly launched in 2017 for social media fashion influencers with as few as 20,000 followers, though preference is given to those with more.
Through the Influencer Program, influencers can create their own curated store front merchandised with shoppable Amazon selections. When a sale is made, influencers get a percentage.
However, traffic to the influencers’ pages largely flows from social media to Amazon, though within Amazon, entering #FoundItOnAmazon allows a view of the various influencers’ selections.
Last year in June, it added The Drop to release limited-edition collections of exclusive streetwear fashions designed by influencers. With collections only available for 30 hours or until sold out, customers can sign up for advance notice of upcoming Drop sales by text or email. “Once it is sold through, it is done, so there is a sustainability component to it,” Meyer adds.
Unlike the Influencer Program where influencers choose across the full range of Amazon inventory, including marketplace offerings, Amazon owns the full supply chain for The Drop.
Vogue joins forces
Perhaps the biggest coup for Amazon yet in fashion is its partnership with Vogue and the Council of Fashion Designers in America (CFDA) in The Common Threads: Vogue x Amazon store front.
Common Threads was originally conceived by Vogue and the Council of Fashion Designers in America (CFDA) to help support small and mid-sized independent designers whose businesses were disrupted by the COVID-19 pandemic. Not long after launching, a deal was struck with Amazon to open the Common Threads online storefront, after it made a $500,000 donation to the cause.
The Common Threads: Vogue x Amazon puts fashion curation right upfront. Each featured designer controls the price and presentation of the fashion shown. Vogue adds a further element of curation with its editors selecting across the designers’ collections to highlight trending themes.
The fashions offered in The Common Threads collections move Amazon fashion up a notch to the true luxury level, featuring designers like Adam Lippes, Anna Sui, Victor Glemaud, 3.1 Phillip Lim and Derek Lam 10 Crosby, among others.
To Meyer’s point that the Amazon search bar does a disservice to consumers in search of the latest fashion, a search for “Common Threads” there didn’t get me to the store front. Instead, I had to use Google to hit the Common Threads landing page.
So Amazon needs to do more work to make this store front fully operational and maybe because it is positioned as a short-term offering, Amazon doesn’t feel the need to jigger its algorithm.
That said, Amazon made news back in January when it announced it was in discussion with 20 luxury brands to launch a luxury fashion platform. Common Threads: Vogue x Amazon has all the makings of that prototype.
Meyer has heard it through the grapevine that Amazon’s luxury platform is going to be delayed until 2021 or thereafter. If it proves its ability to attract luxury-leaning fashion customers now, Amazon will have a long luxury runway later, most especially if it can keep Vogue and CDFA happy.
“The Vogue stamp of approval is very important within the fashion category,” Meyer shares.
Prime day for fashion
Amazon fashion got another boost this summer as it used a confluence of factors to launch what may become a new Prime Day for fashion.
With fashion brands left holding the bag on excess inventory from canceled wholesale orders and Amazon’s traditional July Prime Day postponed till the fall, it held what Meyer calls a “sidewalk sale” for fashion in late June.
Amazon Big Style Sale was described as a mini-Prime Day, which historically hasn’t done much with fashion, rather it’s been focused on electronics, appliances, and basic necessities.
Launched at a moment’s notice, the Amazon Big Style Sale had its glitches, but it has the makings of another major Prime Day-style opportunity for Amazon.
“It was their first truly fashion-centric sale, and while it drove incremental traffic to Amazon in July, it was less than spectacular,” Meyer says. “But then when the first Prime Day launched, it was mediocre at best. But now it is a really impressive program. There’s potential here for something very similar to happen with the Big Style Sale.”
Right now, Amazon is trying another iteration of it with an end-of-summer sale running from August 6 through September 7, offering up to 70%-off daily deals in fashion, lifestyle, and home products.
Called Amazon’s Big Summer Sale, it will also features discounts for premium fashion brands, like Rebecca Minkoff, Kate Spade, Tory Burch, Frye, Vera Bradley, Levi’s and Adidas through its Shopbop subsidiary.
A lifeline for fashion brands
While many fashion brands see partnering with Amazon as “sleeping with the enemy,” it is becoming the “enemy” brands have to sleep with in order to survive. That is what casual shoe brand Soludos found.
“We were a wholesale supplier to Amazon until about two years ago,” Brigid Foster, Soludos’ CMO shares. “We were pretty anti-Amazon
Amazon proved a lifeline for Soludos just at the time when its wholesale orders dried up after the coronavirus shutdown. “We were stuck with excess product and Amazon has been a really good way for us to move product that would have been aging out at this point if we hadn’t had them,” she continues.
Fear of cannibalizing direct sales is a chief concern for fashion brands setting up shop on Amazon, but Soludos found its Amazon shop was a great place to be discovered by customers it hadn’t seen before and maybe never would.
“We’ve not seen cannibalization on our own site from selling through Amazon, which makes me think that it’s new customers we are getting that we wouldn’t have gotten through our own e-commerce site. It’s been incremental to what we would have done without Amazon,” Foster asserts and adds, “It’s been a new source of traffic because it is really expensive to drive traffic to our own website.”
Explaining the additive effect, Foster theorizes that what makes the Soludos brand successful on its own website is different from that on Amazon.
“The things that make us successful on our own website are providing a good experience, storytelling and really engaging with the consumer. Those are not the things that make us successful on Amazon. What makes for success on Amazon are having the best, lowest price, having the fastest delivery, and having reviews,” she says.
And, to her surprise, Amazon has been an excellent partner is helping her learn how to succeed there.
“We have an Amazon account manager – and this is our second one, but the first one was the same – who spends so much time working with us to develop our brand,” she shares. “This has been really refreshing and frankly, unexpected. We have an advocate within the Amazon organization working on our behalf to make our business as successful as possible.”
Keys to success on Amazon
While both Envision Horizons’ Meyer and Soludos’ Foster admit that a brand’s relationship with Amazon can be complicated, they share some tips for other fashion brands considering growing with Amazon.
- Choose the right products to feature on Amazon, especially if it is what might be considered an older style but continues to perform well.
- Develop Amazon-exclusive SKUs, which Amazon is continually looking for.
- Spice up each Amazon listing with informational content that will led to more engagement and transactions.
- Use all five images available on each listing and make sure some of those images tell the brand story, not just show the product.
- Provide good sizing information, so that when customers purchase they are happy with the purchase and will leave good reviews.
- Get a store front and an Amazon account representative to guide you through the process.
- Leverage Amazon’s advertising units and explore Amazon’s new video opportunities. “They have rolled out some amazing new functionalities and creative this year,” Meyer adds.
In closing, Meyer says, “There is absolutely an opportunity for fashion brands to utilize Amazon as a channel to acquire new business. I know some brands worry about cannibalization from their own website to Amazon, but when done correctly, it can become a wonderful symbiotic relationship.”