4 Key Questions Raised by Amazon’s Apparel Ambitions

4 Key Questions About Amazon's Apparel Ambitions

With the scale of Amazon’s apparel ambitions becoming clearer every week, now is an excellent time to look at four key questions its ongoing initiatives pose for everyone in the fashion industry.

1. Are You a Day One or a Day Two Company?

One of the hallmarks of Jeff Bezos’ success to date is the start-up spirit he’s managed to maintain across a global company with a headcount in the tens of thousands. It’s a mindset built around a no-holds-barred approach to employee expectations and a relentless focus on positive customer outcomes.

Every day is “Day 1” for Amazon and the reasons for staying true to that strategy were starkly spelled out in answer to a question at an Amazon all-hands in March, 2017:

“Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”

As Bezos’ full letter to Amazon shareholders in April made clear, the difference between Day 1 and Day 2 companies is vast – and it’s one that everyone in apparel should be considering deeply as the industry heads into a potentially tricky short-term future.

2. Are You Positioned to Capture the Upside of Omnichannel?

The shift from brick-and-mortar to truly integrated omnichannel shopping shows enormous promise in terms of revenue shift, but that transition has been a bumpy one for fashion brands and retailers to date.

In established markets like North America, the move to digital shopping for apparel and accessories resulted in nearly 3,000 brick-and-mortar store closures in the past year alone. On the plus side, it’s also unlocked new revenue streams with $10-11 billion in sales moving online each year.

Amazon’s overall approach shows the value of proactively aiming to capture the upside of this market shift, rather than simply reacting to it. Online initiatives such as the rumored launch of a new digital plus-size line show the company is already considering attacking lucrative apparel verticals in isolation.

The recent announcement of Prime Wardrobe raises the bar around returns to a level many competitors are going to struggle to match. Pair that with the company’s already staggering success in capturing online apparel market share and it’s obvious how large a threat it already is in this space.

Offline, meanwhile, Amazon Go shows just how deeply the company is thinking about omnichannel integration and the future of brick-and-mortar retail. Its recent Whole Foods purchase shows it’s also more than prepared to put serious money behind quickly establishing itself as a leader in offline retail verticals.

No matter which angle of the omnichannel conundrum you look at, Amazon seems extraordinarily well-prepared to leverage its existing strengths while capitalizing on others’ weaknesses. That’s the result of a series of smart positioning plays that fashion leaders can learn from.

3. How Far and Wide Are You Prepared to Bet?

The engine powering much of Amazon’s growth is its commitment to innovation and willingness to take big bets on markets and technologies. With delivery drones already starting to look ready for prime time, Amazon’s wildly ambitious patent filing for airborne distribution warehouses cruising at 45,000 ft. to support them is perhaps the most eye-catching of its long-term plans in that department.

Amazon airborne fulfilment patent
Amazon’s AFC patent shows the scale of their ambitions.

Amazon’s bets don’t just go far into the future, however – they’re also geographically dispersed. Amazon is steadily laying the groundwork for the next generation of smart retail worldwide. Prime’s recent Mexico launch and the acquisition of Souq in the Middle East show the company is prepared to put serious resources into emerging markets to tee up future growth.

At a time when many apparel companies may be tempted to double-down on core competencies or traditional markets to combat market pressures, Amazon’s approach points the way to a more expansive (and profitable) future.

4. How Close Is the Customer to the Heart of Your Company?

At the heart of things, Amazon is driven by the customer. That’s the attitude that informs every decision and what makes it a truly Day One company. As Bezos has said:

“There are many ways to center a business. You can be competitor focused, you can be product focused, you can be technology focused, you can be business model focused, and there are more. But in my view, obsessive customer focus is by far the most protective of Day 1 vitality.”

For fashion brands and retailers, reassessing how close to customers they really are is going to be a core challenge in the next 18 months.

While traditional marketing and promotion will continue to be key in fiercely competitive primary markets, personalization and the use of big data to drive better customer outcomes will increasingly be a major differentiator. That’s an area we already excel in through our work with the biggest names in online fashion. Get in touch today to see how we can help you get closer to your customers and safeguard a profitable future!

Featured image: geralt