Amazon uses Prime Day this year to try to win fashion

On the morning of June 25, Arielle Charnas, a mega fashion influencer, has gathered more than 1.2 million followers on Instagram and owns her own Something Navy clothing line in Nordstrom. She announced the official launch of this edition of Prime Day this year.

It was a not-so-subtle signal on what Amazon hopes to accomplish with its annual extravagance of contracts each year. He still wants to be a bigger name in fashion.

When you think of Prime Day, you may be thinking of Instant Pots and Amazon Echo devices – not half-sleeved dresses and designer heels.

But the global market for clothing and accessories is over $ 1 trillion. Amazon understands that the stakes are high. He uses Prime Day to tout bargains. And he has also had a lot of recent initiatives and links with fashion influencers other than Charnas to show that he is trying to establish the site as a place where to buy more than the products basic. He hopes to gain market share while other clothing retailers are struggling. And he was not afraid to experiment.

In general, when it comes to selling clothes, Amazon is really good at "boring stuff," said Wells Fargo store analyst Ike Boruchow.

Wells Fargo estimated that in 2018, Amazon had generated sales of about $ 35 billion related to clothing and footwear, out of a total of $ 232.9 billion in sales. For the context, sportswear retailer Lululemon $ 3.3 billion in sales last year, while Gap Inc. & # 39; s Net sales were $ 16.6 billion and Costco reported generating sales of $ 7 billion in 2018 with clothing and footwear. Amazon neutralizes them all, even combined.

But many of these transactions for Amazon come from "unmarked" clothing such as white t-shirts, jeans and underwear, according to Boruchow. AmazonEssentials, the Amazon home brand, is popular for these kinds of things – selling a pack of 4 women's camisoles at $ 24.50, or a pack of 10 children's cotton socks at $ 9.45.

In the early 2000s, CEO, Jeff Bezos, had often told his colleagues, "To be a $ 200 billion company, we must learn to sell clothes and food," according to the book describing the business. ascent of Amazon. by Brad Stone, titled "The Whole Store: Jeff Bezos and the Amazon Era." At that time, Bezos set its benchmark based on the size of Walmart's sales, Stone said.

Amazon has exceeded $ 200 billion in annual revenue for the first time in 2018. This figure includes revenues from its other activities such as Amazon Web Services, not just retail. Meanwhile, Walmart 's total business figure was $ 514.4 billion for its last fiscal year.

Amazon is trying to sell more fashionable clothes today as clothing retailers in shopping malls such as Victoria's Secret, Chico's, Ascena Retail Group, owner of Dressbarn, and Forever. 21 close stores and have trouble attracting customers. And department store chains like J.C. Penney and Macy's, who have historically relied on their apparel business to drive sales growth, are contracting.

This Prime Day, which began Monday at 3am and lasted 48 hours, will test Amazon's latest efforts.

The 2019 Prime Day will feature great deals on essentials, such as sweatshirts and socks, but will also promote the company's own brands and fashionable items to showcase its clothing line.

Before the first day of this year, Amazon was trying to sell up to 50% off its leggings, accessories and more, said Jacquelyn Cooley of the 1010data analytics intelligence company. Although fashion items are not on the list of top-selling products for Prime Day 2018, they could very well be this year, given the sheer scale of transactions, did they? she declared.

On Monday morning, buttoned shirts from his Goodthreads line accounted for 30% off, his own Lark & ​​Ro dresses, 50%, and some Calvin Klein and Adidas merchandise, 30% off. The majority of the contracts appeared to relate to his private labels, but not the big brands.

Overall, this year's Prime Day could yield up to $ 5.8 billion in worldwide sales, up from $ 3.9 billion in 2018, while the event had lasted than 36 hours, according to Coresight Research.

But a fashion company does not rely on a two-day sales event. Amazon seems to have amassed an army of fashion influencers on social platforms such as Instagram, gathering tens of millions of followers, in order to write posts with slogans of the type " I #FoundItOnAmazon ".

Women like Paola Alberdi, Sierra Furtado, Emi Suzuki, Leonie Hanne and Patricia Bright each have more than a million subscribers on Instagram. Now, they all share something else in common. They are working with Amazon to promote the platform as a fashion destination – alongside their articles on Reformation, Revolve, Channel, Rebecca Minkoff and other luxury and fashion brands.

One of the new Amazon projects focused on the factors of influence, called "The Drop", was launched in May.

With The Drop, Amazon is pairing with fashion influencers such as Bright, a UK-based vlogger known for posting chic looks and nightly outfits on his Instagram, and Furtado, a Los-based YouTuber. Angeles, known for its more casual style. These partners design collections of limited edition clothing and accessories that Amazon will then create in-house.

An element of scarcity is involved because buyers only have 30 hours to shop each influencer's collection before the next one is abandoned. A text alert notifies customers when a fall is in progress. Amazon also states on its website that every drop produces only limited quantities, so the products are supposed to be sold.

The Drop is very much like the strategy of fast fashion retailer Zara, which has been successful in never doing the same thing twice, sending only limited quantities of items to stores and frequent spins. stocks so that customers come back again and again clothes. Amazon seems to be taking its own weapons against this approach.

Amazon also has its own subscription box program, called "Prime Wardrobe", which is called Stitch Fix and allows users to choose a handful of clothes, try them at home and pay only what they want to keep, then return what they do not want. want to.

And last month he launched an artificial intelligence tool called "StyleSnap". In the Amazon app, users can take a photo or upload an existing image of an outfit. StyleSnap will use machine learning to "match the look" to the clothes on sale on Amazon.

Nevertheless, fashion analysts and experts agree that browsing the Amazon website in search of clothing is often harder than enjoyable. Website design is not advisable for discovering new things or new brands. Most people who shop at Amazon go there knowing exactly what they are looking for. With fashion, Amazon must find a way to make the experience more fun.

Brands are also reluctant to partner with Amazon because they are losing their autonomy in pricing and marketing, the founders told CNBC.

Overall, it has not been easy for Amazon to attract major fashion brands. The majority of product listings on Amazon's fashion page come from third parties. This is probably one of the reasons why Amazon has developed so many of its own lines of clothing and accessories in-house. There are more than 60 of them today, according to TJI Research, such as the Core 10 for women's sports leggings and bras, and the Goodthreads for men's khaki pants and tops.

Separate data from eMarketer indicates that Amazon is poised to capture nearly 30% of the online apparel and accessories market in the United States this year, up from 22.7% in 2016, a revenue approximately $ 18.38 billion.

But remember: online sales in the US still account for less than 15% of total retail sales, according to eMarketer. The majority of purchases are still in physical stores.

The RBC Capital Markets retail team expects that 40% of US apparel sales will be on the Internet by 2023, up from 30% today. According to RBC, e-commerce currently accounts for about 20% to 25% of apparel and accessory sales for most retailers. For specialty retailers, this is close to 29%, for department stores, about 24% and for non-price retailers, only 2%, according to the firm.

And in a survey of 1,000 US consumers aged 18 to 34 in June, RBC found that over 50% of respondents say they are starting their online clothing research on platforms with many brands, rather than directly from the website of a single brand. This could be a good sign for Amazon.

"We believe that Amazon could have a significant presence in fashion, over time," RBC said in a recent note to its customers. "That being said, we believe that Amazon should react more quickly to the changing fashion trends, especially with its own private label inventory. … In addition, Amazon could improve the business." Experience browsing customers in the fashion sector.Try looking for "black women dress up and you'll get more than 350 options."