Amazon Primed for More Fashion Growth
The company's large base of Prime members give it a strong base that can be used to help it grow its fashion business.
Amazon has at least 100 million reasons to keep pushing in fashion and build out its try-on at home Prime Wardrobe business.
Jeff Bezos has long been coy about just how many people get free two-day shipping, streaming video and other perks under the program, but the Amazon founder and chief executive officer signaled something of a new era for the company last week, pegging Prime memberships at more than 100 million.
That’s a huge platform Bezos clearly wants to keep growing and fashion could help him do it.
Prime Wardrobe launched in beta last June and is technically still in test mode, although there have been rumblings that the service is nearly ready for prime time and could be launched more widely. An Amazon representative declined to comment.
Amazon was something of a late-comer to the try-before-you-buy clothing delivery business, but the sector’s garnered more attention with players like Stitch Fix gaining traction.
But Prime Wardrobe is just a piece of the fashion puzzle at Amazon.
Morgan Stanley analyst Brian Nowak estimated that the e-commerce giant, buoyed by 1.5 percent gains in market share last year, will rocket to the top of the U.S. apparel charts in 2018, fueled by Millennials and their shift away from brick-and-mortar stores.
According to comScore’s “State of the U.S. Online Retail Economy” report, “Consumers spend more time on Amazon than the sum of time spent on” eBay, Walmart, Wish, Kohl’s, Target, Etsy, Macy’s, Zulily and Barnes & Noble combined, to the tune of 22.6 billion minutes over both desktop and mobile.
If Amazon’s growing apparel business can capture even a slightly larger fraction of those eyeballs, the results could be felt throughout the industry.
Close to 14 percent of Amazon Fashion’s online listings come from the company itself, according to Coresight Research. That means the web giant not yet optimizing for apparel, a lucrative business that has had peak gross margins of 40 percent over the last decade. Amazon has plenty of reason to chip away at the 86 percent of its marketplace that comes from outside sellers.
And customers seem willing to go along — nearly two-thirds of Amazon Prime members have bought apparel from the platform over the past year.
So far, Amazon’s primary successes in apparel have come in basics and casual wear, in part due to deals with brands such Nike and Calvin Klein. But its passion for fashion goes beyond basics — beyond product even — extending also into an emerging frenzy of style-oriented services. Besides private labels, the company has styling features, technologies like Alexa voice assistant and Echo Look fashion-oriented smart camera, and more. Together, the efforts all point to a deep desire to crack the fashion industry.
Few competitors have the technical chops to compete with an online technology titan like Amazon.
“There’s no other company that could really pursue all of this simultaneously, or at least there are very, very few,” said Elaine Kwon, a former Amazon staffer and cofounder of Kwontified, which helps fashion and beauty brands step into the Amazon platform.