On a busy Saturday, the radio was tuned to a cultural trivia game show called Ask Me Another. The segment I heard was called “Closing Time,” a game that revolved around “bygone retail chains.” At the end of the segment, the host said, “Next year’s game will be called “What’s a Store?” The current state of retail is now well-trodden subject material, but the punch-line-ification of the situation was new to me.
Amazon Has Stretched the Definition of Omnichannel
As we have watched the shifts in commerce progress from concerning to tectonic, Amazon has emerged as the constant protagonist. Mark Bozek said in a 2017 column “Omni is not just two” and Amazon continues to blow the top off of “Omni” by now making a strong play at fashion.
To be clear, the giant has been in dabbling in apparel sales of one iteration or another for at least a decade. They bought Zappos in 2009, they own ShopBop and many private label brands. Still, signals such as recruiting Vogue’s Caroline Palmer as director of Editorial and Social hint that Amazon has been eyeing fashion as a new channel.
The Bezos Box
Since early July when rumors began to circulate, the popular online personal styling subscription service Stitch Fix has seen its stock price decline. On July 30, 2019 Kelli Ell interviewed Amazon Fashion CTO, Tony Bacos in WWD. The article discusses a new weapon in Amazon’s arsenal as the battle for a greater share of the consumer wallet escalates. “In its continued push to become an online fashion destination, Amazon upped the ante today with the launch of its own online styling service: Personal Shopper by Prime Wardrobe. The tool uses a mix of algorithms and human stylists to select the best looks for shoppers.”
While Stitch Fix has perfected the balance of human and artificial intelligence to offer meticulous stylistic suggestions, Personal Shopper enters the category with Amazon’s absolute competitive advantage: price. In addition to the annual Prime membership fee, Amazon will create a monthly style box for a styling fee of $4.99. With either company, the customer pays for the items they want to keep, plus the styling fee. At Stitch Fix, the fee is $20.00 per shipment.
Personal Shopper by Prime Wardrobe is just one new play in Amazon’s Omni juggernaut. Six weeks before they took on Stitch Fix and the other styling subscription services, the company announced its push into the world of influencer fashion. On June 6, Wired published an article about The Drop. “The Drop is a series of limited-edition fashion collections designed in collaboration with influencers.” Instagram star Paola Alberdi, who created the blog Blank Itinerary was the initial influencer/designer. Her collection consisted of street-inspired loose-fitting pants, pink suiting with paper bag waist shorts, a short sleeve wrap mini dress and other items. The Drop also includes an accompanying line of staples. I saw a strappy black dress for $39.90 that might be paired with a kitten heel slide mule for $49.90. Amazon is not a regular subject of fashion editorials but Harper’s Bazaar recognized Amazon’s efforts in an August 6 article with the subtitle “Little House on the Prairie meets NYC Streets.” A recent check-in at The Drop’s site offered only the basics for sale, but asked me to enter my phone number to receive a text alert as “Influencers’ collections can drop at any time. The collections will be available for only 30 hours. Each piece is made on-demand to reduce waste — and my custom items will be delivered within a few weeks”.
The Drop is poised to exploit Amazon’s greatest strength, data. When one considers the scope of data sucked in through Amazon’s direct channels including search, shopping, private brands voice (Alexa) and many others, the company has an insurmountable intelligence edge over every retailer in predicting which influencer or what apparel will appeal to consumers.
Image Search Is a Commerce and AI Boon
Amazon’s new “StyleSnap” feature will further beef-up Amazon’s customer preference intelligence and potentially boost apparel and accessories sales. It is now available in the Amazon App. It uses image recognition technology that allows users to snap a picture of any outfit and match it to similar items available on Amazon. An in-app purchase can be made and Amazon will ship your new look within days.
Not to be left out, Amazon Prime Video will now be a part of New York Fashion Week. The platform will live stream the LVMH backed Fenty x Savage runway show. The show, featuring the designs of the multifaceted Rhianna, will stream on September 20 and include a special behind the scenes Amazon exclusive presentation.
Gen Z and Beyond
Fashion may be a newer emphasis at Amazon, but the company has proven adept at grabbing market share on more basic apparel. An eMarketer report exhibits new quantitative data that demonstrates growth in both the apparel and accessories sectors.
Further, according to a Piper Jaffray report from April 2019, Amazon appears to be a gateway to Gen Z apparel shoppers.
While targeting today’s nascent consumers, the retail industry should look ahead and anticipate the future shopping patterns of what I call the Alexa Generation. This generation is growing up talking to Alexa, having her answer their important life questions, reading bedtime stories, and eventually ordering their stuff. In addition to the comfort this generation feels with the voice-computer interface, the data dossiers that Amazon will have on this demographic, once they are of prime shopping age is mind-boggling.
Amazon is advancing on yet another retail front. If this were Europe, we might hope for some anti-monopolistic legislation to bail us out, but any legislative relief in the United States appears unlikely anytime soon. Consequently, we must develop strategies that will reward the proactive. While Amazon is flirting with physical retail spaces, brick-and-mortar retailers already have the physical spaces with which to experiment. A recent Business of Fashion podcast featured the Retail Futurist Doug Stephens who took this notion a step further, suggesting that stores consider their physical space a media channel.
In the podcast, Stephens explained that every time a customer enters a physical store the place makes a positive or negative impression. These impressions have either a monetary value or cost. If a brand values a Facebook impression at 80 cents, then what is the value of a 15-minute positive in-store impression? What is the cost of a negative impression? This wholistic media perspective puts a different lens on how to value a physical store and can guide the experiences you present within that space.
How to Make Your Store a Media Property
” To ensure largely positive experiences among store visitors, break down the customer journey into moments and micro-moments, always with the five elements of a remarkable experience (surprise, uniqueness, personalization, engagement and repeatability) informing decisions.
” Integrity of product remains important, but the experience around the product has never meant more to the consumer. Unlike the product itself, Stephens argues, “experience is a really difficult thing to reverse-engineer.”
The proof of concept for this theory is on display daily in Manhattan. On Lafayette Street, near Canal, you will likely see a crowd, nearly a city block-long, waiting to get into the Glossier Flagship. While Glossier is a digitally native brand, the thrill of entering this physical retail establishment is visible on the faces of those in the queue. This is not an example of scarcity marketing or a product drop, this is a brand that has a committed customer base who will eschew convenience for the sheer kick of shopping in a physical space.
While a Glossier type devotion will be difficult, if not impossible for the more traditional retailer to replicate, the strategy behind this success is a commitment to delighting the customer. If you are familiar with “Amazon speak” (the language that Amazon executives use to describe the company’s philosophy), this term is a regular talking point. It is time for brick-and-mortar retailers to reclaim it and make it foundational, lest they become a bygone retail chain and the solution to tomorrow’s trivia question.