Amazon has announced a plan to sell high-end fashion on its website. It could be really cool, or really problematic for amazon for a couple of reasons. First, high-end fashion purchases are specific- they are unique, they fit perfectly, or have some intangible that gives people the moral permission to spend the money. Thus, when brought into an eCommerce space there tend to be a lot of returns because people buy 4 items knowing they are going to return 3 and keep the best 1. Returns are expensive. And likely more than the $79 flat shipping fee offered by Amazon Prime if this happens a few times throughout the year. Secondly, there are already some really great outlets for high-end retail. Sacks, Neiman Marcus, Nordstrom and Bloomingdales all have well-funtioning websites, established discount campaigns, audience research and ways to pique interest when shopping might not be top of mind. Third, high-end fashion is already a crowded ball game. Online competition, discount sites and hubs have been around for years. Plus, how do you really compete with the feeling of spending an afternoon trying on clothes, feeling amazing materials and finding jeans that really fit your thighs? Amazon is going all out, though, hiring models, creating photography, and negotiating contracts.
On the up side, if this endeavor works it could change designer fashion sales forever. Some companies are already worried that their brick and mortar stores will become just a showroom for Amazon orders. Their fears are not unfounded. A recent ComScore report determined that leading mobile retail activities look like this: find a store, compare prices, look for a deal. This idea is called showrooming, and it is very real. Go to the store, find the pieces you like, and order them online for a better deal.
On the up side, if this endeavor works it could change designer fashion sales forever. Some companies are already worried that their brick and mortar stores will become just a showroom for Amazon orders. Their fears are not unfounded. A recent ComScore report determined that leading mobile retail activities look like this: find a store, compare prices, look for a deal. This idea is called showrooming, and it is very real. Go to the store, find the pieces you like, and order them online for a better deal.
This is not the only endeavor for Amazon. They have recently developed Amazon Supply to challenge tool suppliers like Grainger, ACME and Fastenal. However, their lack of experience in the category may not do them justice in a category that is firmly based in first hand knowledge and shared trade advice.
Who knows how it will all turn out but one thing is for sure: these diversification efforts from Amazon may change eCommerce forever, or run them dry.
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