Amazon’s fashion ambitions go beyond being the number one apparel retailer in the United States

The news: AmazonThe drive to establish itself as the destination of choice for fashionable shoppers continued this week with the announcement of the European launch of its “Luxury Stores” marketplace.

  • The company has also launched a virtual fitting function for shoes which allows customers to use their phone to see what a pair will look like from multiple angles.
  • The launches come two weeks after the e-commerce retailer opened Amazon Styleits first physical store dedicated solely to clothing.

Amazon’s fashion ambitions: Amazon has been trying for years to establish itself as a high-end fashion player.

  • The company acquired an online women’s fashion retailer Shop in 2006, and launched a male version, Eastern Danishin 2013.
  • Amazon has attempted to bolster its fashion prestige by sponsoring the Met Gala, as well as New York and Tokyo Fashion Weeks. The e-commerce giant will also be an official partner of this year’s CFDA Awards, an event considered the “Oscars of Fashion”.

The perception problem: Amazon has no problem selling clothes: it has exceeded walmart last year to become the top apparel retailer in the United States, according to Wells Fargo. But Amazon’s no-frills user interface is entirely at odds with the luxury shopping experience customers expect.

  • The e-commerce giant’s reputation for low prices and convenience has made it shoppers’ platform of choice for bargain essentials and merchandise, but this emphasis on value makes a dress at $20,335 a hard sell.
  • Given people’s perception of the Amazon brand, the company might be better off turning its luxury operations into a separate arm, one that shoppers won’t associate with where they buy toilet paper.

Redefining the in-store experience: Another strand of Amazon’s fashion expansion is Amazon Style, its brick and mortar clothing initiative which offers clothing from brands such as Levi’s and The theoryas well as private label products.

  • Instead of having stock available in-store, shoppers scan QR codes to send their product and size of choice to their fitting rooms or directly to checkout.
  • This allows store employees to focus on customer needs instead of restocking shelves.
  • Despite mixed success with other physical retail initiatives, Amazon Style’s use of technology to simplify the shopping experience could encourage shoppers to turn to the retailer more often, both in-store and online, for clothing purchases.

What the future holds: The proliferation of luxury e-commerce sites (many of which are in trouble) coupled with competition from brick-and-mortar stores – where most people prefer to buy high-end products – could prevent Amazon from gaining a foothold in the category.

At the same time, even though Amazon Style is causing shoppers to seriously consider the retailer as a style destination, it’s significantly more expensive to scale than the company’s other fashion ventures.

  • In addition to the costs associated with building a department store and its technological equipment, Amazon must also buy inventory, which it avoids with its luxury store market, where brands sell directly to the consumer.
  • While clothing and accessories will be represent 16.1% of total Amazon e-commerce sales the category is not a major profit driver for the company this year, which could make it a priority as the retailer looks for ways to cut costs after excessive expansion.

Go further: To learn more about what US shoppers are looking for in apparel retailers, read our report here.

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