Without a big announcement Amazon has entered the Fashion business. Ed Yruma, managing director at KeyBanc Capital Markets reported yesterday that Amazon.com has launched over 1,800 different fashion products on its site, under seven different brand names it trademarked.
Most of the products are in the Society New York line, selling various women’s dresses and handbags. Second largest is Franklin Tailored which includes men’s clothing and accessories. While Scout + Ro is a line for kids.
Private labeling has been a powerful tool for a lot of Amazon sellers as it allowed them to differentiate from others. As the marketplace grows and more retailers join it, it has become harder to offer unique products. With private labeling this is still possible as usually the products are only available from a single retailer. Yet businesses don’t have to build their own manufacturing and can rely on external companies.
This launch has not surprised us - over the last months we have noticed Amazon looking to hire fashion experts. It only makes sense for them to grow their own unique products, without having to rely on others to supply them. Since Amazon.com has one of the largest data sets of what customers shop for and market trends Amazon is in a great position to use that for creating new products. Similar to how this sort of data is used to release TV shows on Prime TV, Amazon has expanded this to physical goods.
For other sellers this means even tougher competition in the marketplace. Clothing has always been one of the TOP 3 Amazon.com categories, and Amazon is here trying to keep more of it to themselves. Not only that, but also use their tools and data to build products not currently offer at all.