“Who are you wearing?” is a line Amazon executives want people asking.
“Where did you get it?” is the follow-up question those execs are hoping for. And if Amazon continues to grow its investment in the fashion space, the answer to that question might increasingly be a simple answer: Amazon.
Especially as more shoppers migrate to marketplaces over retailers, as the latest data from PYMNTS revealed.
And perhaps that is what has led Amazon to dig into its pockets to shell out a series of investments into the fashion industry that might eventually help grow Amazon’s fashion footprint into a viable entity of itself.
While the terms high-end and fashion might not seem to mix with Amazon’s vast marketplace of goods, that’s exactly where its most recent investment landed it through its participation in an $8 million funding round of the startup fashion site, Who What Wear.
Who What Wear co-founders Hillary Kerr and Katherine Power take shopping tips and make them shoppable by connecting them with the same looks and fashion-forward ideas that celebrities embrace.
What’s most interesting about this investment is that it’s coming from Amazon, but perhaps that shouldn’t be overly surprising, given the fact that Amazon has dipped its hands into high-end fashion lately. Most recently, Amazon even opened a fashion photo studio to take photos of goods featured on its marketplace.
Amazon has been vocal about its intent to leverage its eCommerce strengths into fashion, with new initiatives especially prevalent in Europe, focusing on the United Kingdom, France, Italy and Spain. Last year the company added more than 100 brands to its platform — a roster that spans Hugo Boss, Gucci watches, Tommy Hilfiger, Levi’s and others.
Amazon’s Fashion-Forward Studio Investment
Amazon has a stake in just about every industry one could imagine, so it might not be so much of a surprise that it took that investment a step further into a photo-worthy venture.
In July, Amazon opened a new photo studio in London that sounds more like a shipping warehouse than a typical place for a fashion shoot. That “studio” is a 46,000-square foot space that has 20 photo bays, which Amazon noted is the largest in Europe.
The London venture follows its similar setup in Brooklyn, where Amazon also has a fashion photo studio.
The goal is to help the company create more than half a million images of clothes to be added to its sites annually. Amazon’s decision to open a studio helps the company sell more merchandise through its own platform, with an added push as third parties also get visual space (and sell more) on the company’s site. And fashion on Amazon does seem to turn heads and click “buy” buttons, as the company noted that between April and June, it sold over 30 million fashion products in Europe.
Of course, it’s hard to pinpoint a specific dollar figure on those items since Amazon isn’t keen on breaking down specific financials for individual business sectors.
Amazon’s British Fashion Invasion
The eCommerce giant’s U.K. fashion ambitions extend far beyond the other side of a camera lens.
One of Amazon’s latest partnerships has been with the British fashion retailer AllSaints. And the results of that deal have been “eye-popping,” Patrick Gauthier, Vice President of External Payments at Amazon, told PYMNTS in an interview in June.
That “eye-popping” partnership that Gauthier referenced translates into how Amazon’s Login and Pay API for merchants can help drive big results for merchants. In the case of AllSaints, the retailer saw its conversion rate jump 34 percent nearly instantly.
Amazon’s High-End Fashion Bids
Talks of Amazon’s intent to buy the high-fashion online retailer Net-a-Porter began roughly five months back in March, when it was reported the deal could be worth $2.2 billion (but that was still a rumor). But eventually, we learned Net-a-Porter would not be bought by Amazon. The Italian online fashion retailer YOOX announced it will merge with Net-a-Porter instead.
Amazon has been trying to buy into fashion respectability for almost a decade, acquiring Shopbop in 2006 and MyHabit in 2011. But a 2014 study by brand analyst L2 found that, of 32 luxury brands it tracked, only 5 (or about 16 percent) were officially associated with Amazon.
It’s not that the brands were philosophically opposed to doing business with Amazon — Shopbop carried 14 (44 percent) of the brands, and flash-sales site MyHabit carried 26 of them (81 percent). They just didn’t want to be associated with Amazon’s own down-market brand. Net-a Porter has even more of a luxury reputation than Amazon’s other fashion properties, as well as enough eCommerce experience to make it a match for Amazon.
Why Amazon Wants A Piece Of The Fashion Pie
New research from Cowen Company suggests that the No. 1 apparel seller in the U.S. won’t be Macy’s or some other traditional retailer in five years’ time.
And with the recent hire of Julie Gilhart, the former fashion director at Barneys New York, who will serve as an adviser, it seems Amazon might be poised to learn a little bit more about how high fashion can work for an eCommerce marketplace.
Amazon currently makes up about 5 percent of the apparel market in the U.S. today, and by 2020 that figure is estimated to surge to 14 percent — bumping Macy’s out as the frontrunner.
Amazon’s GMV from apparel is anticipated to hit $52 billion in GMV in 2020, which would be up from its current merchandise volume of $16 billion. Amazon’s growth is suspected to come because of its massive apparel buyers, which research indicates is 34 percent more buyers than Target has.
While Amazon is far from being known as the fashion mecca it may someday strive to be, it certainly has taken some major steps in the past decade to position it further into the fashion realm.
And as more people turn to online shopping — even for high fashion — perhaps the question will turn more from “who are you wearing?” to “where did you buy that?” And if Amazon’s big fashion bet pays off, the answer will simply be: Amazon.