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Online retail giant Amazon is holding its first ever fashion sale this week (22 to 28 June 2020). Marketed as ‘The Big Style Sale’, Amazon claims it wants to help retailers struggling with large unsold stocks after the COVID-19 crisis to organise their own end-of-season sale. The summer sale is aimed at helping both established and smaller fashion brands. Our retail analysts from the US and the UK explore the reasons behind the retailer’s event.

Amazon’s ‘The Big Style Sale’

Source: Amazon

With Prime Day on pause, Amazon is hoping to grab sales from summer shoppers

  Alexis DeSalva, Senior Retail and eCommerce Analyst, based in Chicago:

The COVID-19 pandemic has disrupted the retail market and no player, even Amazon, is immune to feeling the impact. The online retail giant normally runs its blockbuster summer event, Prime Day, in July, but the occasion is reportedly postponed for a yet unconfirmed date. The pandemic has put a pause on celebrations for holidays such as Easter and Mother’s Day, causing many to reduce or freeze spending for such occasions, not to mention the slew of other postponed events consumers typically shop for, such as weddings. Amazon, like a lot of retailers, is likely feeling the pain from this disruption in the promotional calendar, and combined with the missed Prime Day event, it’s exploring new ways to get consumers to spend. The ‘Big Style Sale’ includes seasonally-relevant deals on a number of fashion brands, offered to customers globally.

To pilot a new sales event now, particularly one centered on clothing, may seem odd. With nearly three months on lockdown and increasing concerns over a recession, many consumers have restricted their spending, particularly on non-essentials such as clothing. However, some consumers may be experiencing some pent-up demand to shop, and the official start of the summer season may be just the motivation they need. In fact, nearly half of women and nearly one in five men in the US cite the change of season as a reason they buy clothing. In addition, consumers who have grown accustomed to doing more shopping on Amazon, while stores remain closed may be more inclined to shift clothing purchases to the online retailer as well.

Amazon has attempted to establish itself as a clothing and fashion destination, but has struggled to be successful. Yet, its latest actions indicate it’s not giving up. In May 2020, Amazon announced a partnership with Vogue and the Council of Fashion Designers of America (CFDA) – with the launch of a digital storefront, signaling a breakthrough to its entry into the luxury fashion market. Common Threads: Vogue x Amazon Fashion is designed to help smaller sized fashion businesses and connect them directly to consumers. The two initiatives could be the push Amazon needs to shift consumers’ perceptions and become a bigger fashion destination. 

Common Threads: Vogue x Amazon Fashion

Source: Amazon

Amazing is looking to expand its fashion offering

Chana Baram, Senior Retail Analyst, based in London:

 Fashion is an increasingly important category for Amazon and is currently estimated to account for 11% of Amazon sales in the UK and is estimated to account for around 2% of the clothing market in the UK. However, it is natural that Amazon would want to expand its fashion offering and extend its reach to match the rest of Amazon’s growth over the last few years. However, this is a difficult task for any retailer. Fashion retail is a very over-saturated area in the UK, both online and offline, and Amazon’s target demographic is fairly wide.

The lockdown and subsequent closure of non-essential retailers will have undoubtedly benefited the likes of Amazon, particularly as people have been shopping more online. This has also given retailers like Amazon an opportunity to collaborate with brands that perhaps would not have partnered with it before. ASOS’ CEO Nick Beighton has revealed that brands who were previously reluctant to sell via the fashion platform were entering into negotiations to come on board, and many brands may be doing the same with Amazon. Challenging times may have given Amazon the leverage it needs to fully break into fashion, as evidenced by its Common Threads initiative in the US. It was previously unthinkable that luxury items being sold for as much as £1,200 would be a good fit for Amazon, but in these unprecedented times, we may yet see a similar initiative on this side of the pond.

More deals with fashion brands and more Amazon own-brands?

It would be surprising if we didn’t see Amazon enter into new deals with fashion brands and also up its number of own-branded labels. Until now, these lines have not been particularly well-publicised, but this could change in the near future. However, to truly appeal to a wider range of fashion shoppers, Amazon will have to work on how it presents its fashion items. For example, in November 2019, Nike announced it will stop selling directly through Amazon. Nike wants to focus on its direct-to-consumer channel, but the move also hinted that the brand was not happy with how it was being represented on the site. Some of the more premium brands have a separate ‘storefront’ on Amazon, helping them to appear more upmarket, but these will need to become more sophisticated to win more brands over. Currently, fashion items are being sold and displayed in much the same way as all of the other many types of products sold via Amazon. For the retailer to truly make inroads in the fashion industry, it will need to improve the customer journey, perhaps with a separate Amazon Fashion website where products can be displayed in a more appealing way. Amazon has many threats such as ASOS, a pure play retailer dedicated entirely to fashion. It is constantly evolving and innovating, adding options such as AR technology, which allows consumers to see clothing on different body types. It is much harder for a retailer like Amazon, which is involved in multiple business areas, to be able to continue competing without making big changes. 

Amazon’s fashion sale offers

Source: Amazon