By Evan Clark. Source: Business of Fashion.
It is one of the top companies to watch in fashion, setting the tone for how to serve shoppers online, experimenting with how to sell to them in a physical environment through its new book stores and beckoning brands with billions of consumer clicks on its marketplace.
But will it grow into a fashion powerhouse under its own brands?
That could be one of the most important questions facing the industry right now as the economics of retail break down, the web gains steam and store traffic slips away.
The answer starts with the eight brands Amazon already is developing into its private-label stable. They open up a window on its in-house fashion ambitions and show a company looking to take advantage of its scale and traffic with basic looks that can build replenishment businesses.
These are the brands Amazon has started with and is supporting actively, according to sources familiar with the effort:
• Lark & Ro: dresses billed as “Styles you’ll love, season after season.”
• Ella Moon: women’s wear described as “Globally inspired, everyday beautiful.”
• Mae: bralettes and panties.
• Paris Sunday: dresses and tops.
• Amazon Essentials: basic polo shirts, shorts, women’s intimates and the like.
• Buttoned Down: men’s dress shirts starting at $39.
• Goodthreads: casual men’s shirts and pants.
• Scout + Ro: kids’ styles.
(More are expected in the future. For instance, the company was looking earlier this year for someone to “build authentic activewear private-label brands.”)
The picture has been muddied somewhat as the outside world looks in and tries to determine just what’s going on behind the scenes at Amazon, which seems more likely to quietly test a new idea than making a splashy new rollout.
Some brands that Amazon sells were holdovers from the now-shuttered MyHabit.
An Amazon Fashion spokeswoman declined to discuss the company’s broader private-label efforts, but did note that, “Franklin & Freeman, Franklin Tailored and Society New York were MyHabit private brands whose inventory was transferred to Amazon after the subsidiary closed in July of 2016.”
Those brands tended to have more of a style-sensitive slant, giving the impression that Amazon was going after the fashion customer directly. But its core private-label offering shows an interest in at least starting simple.
“Similar to what they’ve done in diapers and baby wipes and batteries, they’re entering the market with, from what I can tell is an emphasis on the basics side of things,” said Matt Kaden, managing director at MMG Advisors.
Kaden said the web giant is learning from its broader fashion business.
“Amazon aggregates all this data on the markets and then with their private-label program they’re coming in to take market share,” he said. “There’s a ton of data, they’re going to process that data and use that to inform their product development.”
Kaden said Amazon, which is working with private-label producers to make the goods, is starting with small orders and then looking to replenish.
“If you’re a maker of basics, you should be watching them very closely,” he said. “They’re a promotion machine, they’re going to promote their own content. In high fashion, maybe it’s a different story. Or maybe not — to be determined.”
The notion of private label is, of course, very familiar to the fashion world, where brands have long resided next to and been compared with house-made goods.
Ed Yruma, managing director at KeyBanc Capital Markets and a close observer of Amazon, said the company’s private-label efforts are “looking closer and closer to your traditional — this is kind of a bad word today — your traditional department store.”
Amazon’s fashion brands are value oriented and are complemented on the site by branded merchandise from outside vendors.
“They’re kind of checking all the boxes now and this private label is really filling the same role that [it would] at Nordstrom or Macy’s,” Yruma said. “We think they’re going to continue to grow the private-label business and continue to be strategically focused on apparel.”
David Lamer, founder of fashion tech consultancy Core Brand Advisors, pointed to Lark & Ro and said Amazon was building “very sharply priced product — it’s basically easy items that people will gravitate to and search for.”
While many industry executives see Amazon as a competitor, Lamer said the danger tied to Amazon isn’t so much that the web giant is going to steal business from apparel companies, but that apparel companies aren’t going to keep up.
“Amazon is a threat to the fashion industry because it’s a technology that the fashion industry ought to be embracing in a big way and they’re not,” he said. “It’s not the future, it’s here.”