At last night’s Met Ball in New York City, former Barneys fashion director Julie Gilhart, who recently left the luxury retailer to work as a fashion consultant at Amazon, hit the red carpet with quite the corporate accessory: “AMAZON.COM” nail art. As the sole sponsor of high-fashion’s grandest event and its CEO Jeff Bezos (pictured at left with Vogue‘s Anna Wintour and designer Miuccia Prada) serving as the evening’s Honorary Chairman, Amazon made it very clear last night that its commitment to fashion is full-fledged. Like the online retail giant did with books, then electronics, toys and everything else, Amazon is taking its foray into fashion very seriously–and putting serious money behind it.
Earlier this year, as one of L2’s ’10 Digital Predictions for 2012’, we posited that Amazon’s dominance in the e-commerce and m-commerce markets — as well as the affluent, luxury consumer market — would only become more pronounced in the months ahead. Already commanding 37 percent of all mobile transactions and boasting a growth rate five times that of in-store retail and three times the rate of online retail, Amazon is in a class by itself. Its popularity, on the other hand, extends to all classes, in particular, those with a considerable amount of money to spend. Among U.S. households with incomes of $300,000 or more, Amazon ranked far and away as favorite online retailer. Considering that 92 percent of people in this demographic shopped online in 2011 (up from 64 percent in 2010), their loyalty can only mean good things to come for Amazon’s bottom line.
The big question right now is, will Amazon, with its newfound interest in fashion, do to that industry what it did to publishing? In addition to sponsoring the Met Gala, Amazon has poured considerable resources into the expansion of its fashion offerings. From assembling a more upmarket inventory and hiring a bigger, more experienced staff (seasoned industry experts like Gilhart certainly don’t come cheap) to investing in aesthetics like a glossier web design, high-quality in-house photo shoots, and soon, more luxe delivery and comprehensive digital and print ad campaigns, Amazon is spending a great deal of money to raise its fashion profile. These moves, according to L2 founder and CEO Scott Galloway are the right ones. “Prestige is a looksist industry,” says Galloway, also a clinical professor of marketing at NYU Stern. “And rightfully.”
Whether Amazon will redefine the way we buy fashion is yet to be seen but very much a possibility. “This could be another example of Amazon being the giant poisonous mushroom that kills everything in its path,” says Galloway. “There’s no reason to think the same thing that happened to Borders couldn’t happen to Barneys, Saks and Neiman Marcus.” Small to medium-sized brands (the vast majority in the fashion design world) may have no financial choice but to go with the well-funded giant that can offer to buy multiple orders of entire collections, rather than a select few pieces. Designers may initially hesitate to sign these “deals with the devil,” as Galloway describes them, but with so many already aligning with large corporations like H&M, Macy’s and eBay, the line between fashion as art and fashion as commodity is as blurred as it’s ever been. And that, is very much in Amazon’s favor.
(Image via Getty)