Chances are this is the first, and last, time high
fashion will be discussed on this blog. But it’s a story that bears watching
since Amazon is using its “go big and spare no expense” philosophy on the fashion
industry.
“It has the latitude to set prices and
charge whatever it wants,” Sucharita Mulpuru, an analyst for Forrester
Research, said of Amazon in The New York Times. “That is a huge threat for brands.”
Sound familiar?
Amazon’s investment of millions into high-end fashion has
the potential for much higher gross profit dollars per unit than books or CDs.
The company is hiring photographers to produce 3,000 images a day for shoppers to
browse. It’s also offering free shipping and returns on apparel to attract
online customers to its online storefront. Amazon is working to recruit high-end
fashion firms, such as Michael Kors, and was even a sponsor for the Costume
Institute Benefit at the Metropolitan Museum of Art.
Many in the industry worry they will not be able to
compete with Amazon’s purchasing power and its willingness to undercut
traditional retail markups. Amazon CEO Jeff Bezo has said his firm will not
take the low-price approach it’s used to disrupt other industries on its high-fashion
project, but most are unconvinced.
“A manufacturer does not want to kill a
business, and the best way to kill a business is to have the same product
selling for less on Amazon,” said Ron Friedman, a retail accountant at Marcum
LLP.
