Amazon Can Become America's Top Apparel Retailer (But Still Can't Sell Fashion)

Amazon Can Become America's Top Apparel Retailer (But Still Can't Sell Fashion)

"Amazon's fashion sales are weak on both 'metrics' and 'presentation' at this stage." said by Manny Chirico, the CEO of PVH Corp—the parent company of Tommy Hilfiger and Calvin Klein.

The fashion industry has undergone a revolution thanks to the arrival of the internet. What was once regional choices have become worldwide sensations all because of the web. Sitting at the top in terms of overall success is Amazon, the largest online retailer in the world. Just from looking at the stock prices in recent years, Amazon has simply blown away all other major retailers with its performance.

In terms of gross margin, the Clothing & Apparel section for Amazon has enjoyed the most success. This is why the company has invested heavily into this category because of its success over the past decade. One of the more interesting investments has been in a new program by Amazon called Prime Wardrobe.

Apparel Brings Amazon the Most Profit Margin than All Other Categories

Apparel Brings Amazon the Most Profit Margin than All Other Categories

What is Prime Wardrobe?

This is a service that lets you try clothes before you buy them which is a novel concept on the internet. The process works like this:

1. Look for eligible items with the Prime Wardrobe badge

Amazon Prime Wardrobe Eligible Items

Amazon Prime Wardrobe Eligible Items

2. Choose three or more clothing, shoes, or related items from the Prime Wardrobe category

3. Try them at home for a seven-day run

4. Keep and pay for what you want, send the rest back using UPS service

The advantages of the Prime Wardrobe service are considerable, starting with the fact that you get the chance to “test drive” the clothing, shoes, or related fashion items before having to make a purchase. You also get the wide range of selection offered by Amazon. Plus, returning what you do not want is easy with the resealable box and prepaid label.

Finally, if you are an Amazon Prime member, there is no membership cost to joining Prime Wardrobe. So, for those who have Prime memberships, adding the wardrobe part is something that does not cost you a dime. On June 20th, 2018, it became available to all US Prime members.

Unfortunately for Amazon, having all those advantages has not translated to the customer satisfactions that the company wanted.

What Does Prime Wardrobe Miss

It’s probably not fair to say that Prime Wardrobe is failing to succeed, but rather that the program is not nearly as successful as Amazon expected it to be despite being in Beta testing for well over a year. While it will arguably continue because just like other Prime services its profits are still more than the expenses, it is something of concern for Amazon that it is not the blockbuster they thought it would be.

1. Public Acceptance: US customers have simply not gravitated to Prime Wardrobe in anywhere near the expected numbers, despite the program seemingly answering one of the biggest questions consumers have about purchasing clothing online which is namely will it fit properly and look right. According to Morgan Stanley, only 6% of the shoppers who shop on Amazon think the clothing on Amazon is fashionable and 20% of the shoppers do not consider Amazon to be a destination for fashionable clothing.

Top reason for purchasing clothing from Amazon

Top reason for not purchasing clothing on Amazon

2. Personal Touch: Although Amazon has enjoyed considerable success in selling affordable clothing, it is still a clunky process of sifting through endless product photos just to find the curated items. It lacks personalization, which means that despite the information gathered, the ability to synthesize and respond properly is lacking compared to smaller online companies that can focus on one customer at a time and provide fashion tips.

Amazon Women's Clothing Featured Categories

3. Real Cost: Even though you get a prepaid return shipping label, you still have to go to the nearest UPS store or mailing service to have the clothes sent back. When you consider the cost in time, gas, and effort, that can really add up and dissuade anyone from sending back clothing after the first time. It’s far better to get the clothes that fits properly and looks right in the first place than to get something that doesn’t and return.

Waiting in line at the post office

4. Lack of Focus: Another issue is that Amazon is really a large retail store like Walmart or Target, not a fashion store that specializes in a specific audience for their clothing. By trying to be all things to all people, it makes it more difficult to be the right store for the right customer. That lack of focus makes it difficult for a program like Prime Wardrobe to succeed, at least when it is run by a large online retailer. After customers also found out that popular sizes and colors usually aren’t eligible for Prime Wardrobe, it becomes more frustrating.

Popular sizes colors aren't eligible for Prime Wardrobe

However, with all that being said, it is true that other stores still can succeed where Prime Wardrobe has been found lacking. Such an example can be highlighted with the success of MD Online Boutique and its particular line of clothing that is directed at women who want more than what larger online retail stores like Amazon could possibly offer.

MD vs Amazon

MD vs Amazon

Why Smaller Retailers Still Can Beat out the Ecommerce Giant

There are many reasons why smaller businesses still can succeed despite the heavy investment of Amazon in a program that failed to live up to its potential at least so far. This is in large part due to Amazon's historical shopping nature: buying cheap made products and returning them after trying. Unsurprisingly, Prime Wardrobe perfectly follows this blueprint and is really not meant to be built for the long haul.

The bottom line is that while Amazon may have general success across a wide range of selling clothing and accessories, when it comes to specific programs like Prime Wardrobe, the company itself lacks the focus on vertical (or niche) markets. Amazon can surpass Walmart as the top US apparel retailer, but it still can't sell fashion.

Think about it. Do most people feel any personal connection with Walmart? If not, why would they have that feeling with Amazon? By focusing on vertical markets, smaller businesses can build a stronger connection with the target audience. For instance, over the past few years, MD Online Boutique has developed a strong reputation for their line of women’s clothing that combined the stylish with the practical for a low, affordable price. This reputation has been enhanced considerably by the emphasis on fashion trends which provides a superior shopping experience for those who shop online for boutique clothing. It is simple: focus on the products and focus on the people who love the products.

Beats Amazon in Vertical Markets

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