Amazon.com, Inc., the largest internet retailer in the world, seems constantly to be adding to its list of goods and services offered on-line, and it has now focused on high fashion merchandizing. An article in the New York Times detailed the latest effort in the company’s quest to broaden its product line.
Amazon introduced clothing to its websites in the mid-2000s and has now turned its attention to higher-end fashions because of more attractive profit margins. Starting with its own website as a base, Amazon has purchased fashion websites and started others. The most recent is MyHabit, developed in 2011 using the latest in internet-based video technology, to allow consumers get a more realistic idea of what the item will look like before the purchase.
Moreover, the company is taking advantage of its capacity to collect and evaluate a wide range of consumer buying characteristics and shopping habits, in order to offer fashion items that are more likely to appeal to the individual shopper.
Meantime, the very advantage Amazon holds in the realm of internet merchandizing is viewed as cause for concern among manufacturers of some high-end fashion brands. Foremost among those concerns is that with its huge customer base and turnover volume, there is the threat that Amazon will dictate prices, which will result in lower returns for the producer.
The company has acknowledged that it has taken that route in other industries, but insists it intends to abide by a historical schedule of price markdowns established by the fashion industry.
The entire article can be read here.
Questions: Are consumers of ‘high-end’ fashion likely to be viable on-line purchasers of typically expensive products?
Can this latest effort by Amazon be viewed as simply the next step in the evolution of an internet merchandizer, or does its massive size pose a threat to competition?
Does the advantage of a large customer base engaging in fast and easy shopping, offset the potential for high fashion producers accustomed wide profit margins to see those margins squeezed?