Word this week that Amazon is considering launching its own line of clothing has divided fashion industry analysts, with some saying such a move into a crowded and competitive marketplace would be risky, while others saying it could usher in a new era in personalized clothes shopping.
The possibility that the mammoth online retailer, worth nearly $54 billion, may be branching out even further in the e-commerce game first surfaced Tuesday at the WWD Apparel and Retail CEO Summit.
Jeff Yurcisin, VP of clothing at Amazon Fashion and CEO of Amazon’s Shopbop unit, said that Amazon might launch a private-label brand to keep customers happy, according to a report in Buzzfeed.
“For Amazon, we know our customers love brands, many of the brands in this room…and that’s where the lion’s share of our business comes from,” Yurcisin said, according to Buzzfeed. “When we see gaps, when certain brands have actually decided for their own reasons not to sell with us, our customer still wants a product like that.”
According to the article, Yurcisin said that Amazon may get into private-label for those kinds of goods — though the reporting did not provide a direct quote on the matter.
Yurcisin could not be reached by NBC News for comment, and Amazon did not respond to a request for comment.
Amazon already sells a lot of clothing. A recent report by the financial services firm Cowen and Company forecast that Amazon will pass Macy’s to become the top seller of clothing in the U.S. in 2017.
If Amazon does proceed, it wouldn’t be its first foray into private label brands.
“This isn't the first time (Amazon) has done private label,” noted Sucharita Mulpuru, a vice president and principal analyst serving eBusiness and channel strategy professionals at Forrester Research. “They've done it with AmazonBasics, and even with baby wipes.”
AmazonBasics, a collection of consumer electronics items was launched in 2009, provides shoppers with “basic” electronic needs like USB cables, batteries, and charging ports.
Amazon has other private-label brands, too, such as Pinzon, which deals in home and kitchen items, and Strathwood, a line of patio and garden furniture. Last December the company unveiled Amazon Elements, its line of “everyday essentials with transparent origins,” for Prime members. At present it appears that the line is limited to baby wipes, but last May, the Wall Street Journal reported that Amazon was prepping to bring food items to the Elements brand.
Despite Amazon’s experience in private-label, a fashion brand would still be a big leap for the company — and a potentially risky one.
“Private label in fashion is one of the easiest and hardest things to do,” said Mulpuru. “It's a crowded and competitive field and it’s hard to stand out.”
But if anyone is positioned to make a slam dunk in the arena, it’s Amazon. They have the market share, accounting for “20 to 25 percent of all e-commerce in the U.S,” Mulpuru says, and they have the data to know what the masses want.
“Amazon has something every retailer wants: data,” agreed Jake Gasaway, co-founder and vice president of platform at the online inventory control solution Stitch Labs. “They have your browsing history, your contact information and billions of data points that allow them to serve up suggestions a customer might be interested in purchasing.”
Gasaway points a recent survey in the tech publication re/code, which noted that of 2,000 online shoppers in the U.S., 44 percent said they go directly to Amazon when looking to buy or research a product online.
“Amazon is the number one site people turn to when searching for products online,” said Gasaway. “Also, not only does Amazon have search data, but they (also) have the purchasing data associated.They have troves of information that tells them what people want, and what people are searching for that is not available on their site.”
Mulpuru said that if Amazon proceeds with its own clothing line, it most likely would aim to provide looks that speak to current, broad trends, rather than “knock-offs” of specific designer items.
“Amazon's customer positioning overlaps more with Wal-Mart than it does with Macy's, so if they want to capture share it would have to be more mass, which would suggest something that would be more like Wal-Mart's private label,” speculates Mulpuru. “Maybe they would have celebrity spokesperson tied to it, a Disney star, for instance, that would give them some credibility.”
But even if Amazon did go for more of a designer knock-off feel, the move could be welcomed by consumers. What’s more the knock-offs could draw in brands that are resistant to sell on Amazon.
“Knock-offs wouldn’t exist if there weren’t any demand,” said Gasaway. “Sure, not everyone would buy a knock-off, but millions will. And if Amazon can put enough pressure on the brands not selling on their marketplace, the brands may begin to sell there. Over 80 percent of sales on Amazon came from third party sellers in Q3, according to ecommercebytes, (but) Amazon wants everyone selling on their platform.”