What’s Next After Amazon Adds In-House Basics?

Experts weigh in on Amazon’s push into private label and ponder the possibility of physical stores for fashion.

Amazon is forging ahead with its private-label apparel program, focusing on basics and convenience — but whether it will translate into physical stores is another question.

The e-tailer’s latest offering comes in men’s wear through a brand dubbed Buttoned Down, which offers $39 dress shirts that are only available to Amazon Prime members. The shirts come in 72 size combinations. There are plans to expand into dress pants, sport shirts and sweaters.

“We’re always looking to make high-quality apparel more accessible for our guys,” said Amazon Fashion men’s fashion editor Warren Satchell. “Whether he’s wearing it with a suit and tie, or just tucked into jeans on a casual Friday, Buttoned Down is a no-fuss, reliable option that guarantees effortless style and great value.”

Buttoned Down joins Amazon private label brands such as Franklin & Freeman, Franklin Tailored, James & Erin, Lark & Ro, North Eleven, Scout + Ro and Society New York, which sell goods ranging from men’s dress shoes, suiting and accessories to women’s casual and contemporary looks and accessories, as well as children’s apparel. Buttoned Down is one of the first fashion brands to launch as a Prime exclusive.

“I find it to be positioned on Amazon as the anti-brand,” said Mortimer Singer, chief executive officer of Marvin Traub Associates, of Buttoned Down. “It’s speaking to a customer that really does not care about brand, a Prime customer who follows that kind of profile. There are a lot of American men who don’t really think too much about the white shirt that they wear to the office every day.”

Singer said that it seems the merchandising was driven by analytics and was devoid of all the “jazz hands,” delivering a practical product instead of sizzle.

Amazon has courted the fashion crowd, for instance agreeing to sponsor Tokyo Fashion week, but its private label focus has been on basics and not high fashion.

“It’s an item that people don’t have an emotional attachment to, but they need,” said KeyBanc Capital Markets analyst Ed Yruma, of the private-label offering.

The analyst predicted Amazon would continue its private-label push with other replenishment items, such as socks and underwear — “areas where the brand is not as important,” Yruma said.

Amazon has been making a concerted effort to expand private-label products since the 2009 introduction of AmazonBasics, which offers electronics and household items ranging from computer keyboards and cables to backpacks and dinner plates. A recent visit to Amazon.com showed the best-selling pieces under “clothing” as Levi’s men’s jeans; women’s fleece-lined leggings; men’s Fruit of the Loom undershirts; and scarves, hats and socks.

Over time, Yruma predicted Amazon will develop a physical retail strategy for apparel, but what that might look like is unclear.

One option is a version of the cashier-free convenience store model. This month, Amazon began testing Amazon Go, a grocery store in Seattle that works without checkout lines or cashiers. The core of this model, which focuses on convenience and automation, would be in keeping with its private-label approach to apparel.

For now, the bigger threat to other fashion players is Amazon’s online marketplace, said Scott Galloway, founder of research firm L2 and a clinical professor at New York University’s Stern School of Business.

Galloway considers the private-label push to be a bit of a “dud,” based on user reviews and comments.

He said the good news for other retailers is that the reviews on Amazon’s private-label items online are “underwhelming, but the bad news is that [Amazon] doesn’t tend to give up. Their progress has been slow, but that doesn’t mean they are going to stop.”

He pointed out predictions that Amazon’s apparel sales will likely be the biggest among retailers by 2020.

Galloway said a smart move from Amazon would be to acquire an established retailer with a store base that could act as warehouses. This, however, would be a departure from Amazon’s current strategy of building new businesses in-house, such as with Amazon Go.

Amazon’s investment into automation, in both warehouses and in the Amazon Go store, is not complementary to high fashion, he said.

“Fashion is going high-touch and Amazon is going the other way, so its current strategy isn’t set up well for high fashion,” Galloway said. “No one is safe, but grocery and mass-market brands are much more at risk than fashion brands, but you can never count them out — they have limitless capital and perseverance.”

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