22 Oct Amazon woos fashion industry as new studio opens in N.Y.
In Williamsburg — a Brooklyn neighborhood that’s become something of an epicenter for the prototypical hipster — Amazon.com is working to develop its own hip cred.
This past weekend, the Web giant held the official opening for a 40,000-square-foot photo and video studio, built in a cavernous old glass factory. The studio, which will produce on-model images for the company’s rapidly growing Amazon Fashion group, counts the popular craft beer maker Brooklyn Brewery and edgy Vice Media among its new neighbors.
Inside the old factory, Amazon is trying something the fashion industry has never seen before. It has created a studio with 26 photo and video bays that can produce more than 19,000 images in the course of a day, capturing how blouses flow, how dresses hang, how coats look as models move.
The studio is the centerpiece of Amazon’s bid to become the go-to stop for Web shoppers looking to fill their wardrobe. And Amazon is betting that its huge studio investment — the company wouldn’t disclose the cost — will give it an advantage over brick-and-mortar retailers.
“When we do fashion, we can do a lot of things online that you can’t do any other way,” Amazon Chief Executive Jeff Bezos said in an interview with The Seattle Times. “When you look at some of the on-model photography we’re doing, especially the video, and how the clothes drape and so, that can be more helpful than seeing it on a hanger or on a mannequin. It’s very different.”
Fashion is one of those emerging businesses at Amazon that has Bezos’ attention. While Amazon has sold apparel, shoes and accessories for years, the company has intensified its focus on the category in the past few years.
In addition to the apparel site on Amazon.com, the company owns the flash-sale site MyHabit.com , shoe-seller Zappos.com and the fashionista site ShopBop.com. Already, Amazon has 35 million active customers shopping for clothes, making the profitable, multibillion-dollar-a-year business the company’s fastest-growing category, said Amazon Fashion president Cathy Beaudoin.
And Amazon’s ambitions for the apparel business are as vast as the inside of the new photo studio.
“We want to be a great department store, like Bloomingdales, Nordstrom and Saks,” Beaudoin said. “But what we have that they don’t have is unlimited shelf space.”
Alluring, concerning
It’s easy to see why the business is so appealing to Amazon. According to Forrester Research, the overall apparel, accessories and footwear business generated $370 billion in sales last year in the United States alone. And just 11 percent of that business was done online. There’s little doubt that online fashion sales will grow, and few companies are as well positioned as Amazon to seize that business.
“They are tapping into very large buckets of consumer spending that are very little penetrated online,” said Mark Mahaney, an analyst with RBC Capital Markets who follows Amazon.
Because the category is so huge, Mahaney believes that Amazon’s apparel, footwear and accessory business will eventually surpass the sales of its books, movies and music, perhaps within five years.
Building that business, though, is not without challenges. Perhaps the biggest is persuading fashion labels, whose survival depends on how fickle consumers perceive their brands, to sell their goods to Amazon. Many companies are drawn by the opportunity to put their shirts, coats and scarves in front of those millions of Amazon shoppers. But some are hesitant to have their exclusive items sold in a store where consumers can pick up batteries, DVD players and tube socks.
For some fashion brands, Amazon’s size is both a lure and a concern. One reason it’s so large is that it offers products from third-party sellers, vendors unaffiliated with Amazon that hawk goods on the site and pay Amazon a commission. Occasionally, those sellers offer in-season fashions for below the manufacturer’s suggested price, which can diminish a brand’s value. And Amazon often matches third-party seller pricing.
“At the end of the day, the question is do I really want to be in the basket with Pampers?” said Hana Ben-Shabat, a partner at the A.T. Kearney consultancy, where she advises apparel and cosmetics companies. “And do I want to be in a shop where third-party sellers destroy my brand every day?”
Building credibility
Amazon’s Beaudoin has heard the concerns. While she wouldn’t say Amazon won’t match third-party prices, she said, “We respect the pricing cadence the industry has established,” where prices slide only as unsold items sit on shelves after their sales season ends.
But she also said it’s “incumbent” for the fashion labels to keep their sales channel “clean,” making sure in-season items don’t end up at discount sellers.
Amazon needs to walk that fine line as it woos the fashion industry. That’s one reason why the preternaturally parsimonious Amazon has spent lavishly to build its credibility in the business. It recently placed ads in The New York Times Style section, Vogue and Harper’s Bazaar. It sponsored the Costume Institute Benefit, a high-profile industry event at the Metropolitan Museum of Art last year, where Bezos dined next to Mick Jagger and Scarlett Johansson.
“Very accessible”
But there’s little doubt that the biggest push to be cornerstone of the industry is the Brooklyn photo studio. In September, “Clique,” the Kanye West song performed with Jay-Z and Big Sean, was blaring while workers raced to finish the renovations as models, stylists, photographers and videographers busily created imagery just a few yards away.
In the past, Amazon shot fashion photos for the website in studios it built at five of its warehouses around the country, where the apparel had been shipped. The company would often fly in models and photographers to create the imagery.
“We wanted to have one single hub where we could ensure excellence,” Beaudoin said. “And we wanted to be in New York because New York is, bar none, the best source of creative talent in the world.”
The studio, expected to have 175 employees at its peak, sits a block from the east shore of the East River. From the roof, which Amazon is converting into a patio for staff to eat lunch, the Manhattan skyline is in full view, from the Williamsburg Bridge and the skyscrapers of Wall Street to the southwest to the Empire State Building and midtown Manhattan farther north.
And while Amazon has hosted an A-list fashion event, and even hired Barneys former fashion director Julie Gilhart as a consultant, the sensibility of the site is much more midmarket. In one photo bay, a photographer was snapping pictures of a male model wearing Tyr athletic wear. A Pendleton flannel shirt sat on a rack outside another photo bay.
Beaudoin realizes that Amazon Fashion can’t succeed by trying to appeal to every shopper. That’s because consumers want stores to curate clothing for them, based on specific tastes. Some shoppers head to Nordstrom because they know it will carry what they want, while others head to Gucci because it appeals to their tastes. Amazon Fashion has its own sensibility.
“Our fashion is very accessible,” Beaudoin said. “It’s very easy. Our point of view is that fashion is easy to wear.”
Digital boutique
The home page for Amazon Fashion currently features models in a selection of fall coats from designers such as Vince Camuto, Via Spiga and McGinn. All the coats sell for less than $350. The site for women’s jeans has a selection of skinny, bootcut and ankle-length models, among others, from designers such as 7 For All Mankind, True Religion and Hudson Jeans.
“We did have initial hesitation about partnering with the site … but Amazon has done a lot to distinguish the category,” said Michelle Bartlett, women’s specialty manager at Hudson, whose jeans approach $200. “We’re happy with the way our brand is marketed. The savvy Amazon shopper knows the value of a Hudson jean, and is willing to pay for it.”
For the brands that have agreed to work with Amazon, marketing is the key. When shoppers search for a specific brand, Amazon takes them to a digital boutique, with the designer’s own messaging, often with images produced by both Amazon and the brand. Unlike many other categories on the site, it’s not merely a list of products.
“It doesn’t look like a flea market,” said Chris Quinn, executive vice president of sales for New Balance, which offers a limited selection of footwear and casual sports apparel on Amazon Fashion.
Like Hudson, New Balance has been cautious with its sales to Amazon. It offers only models that appeal to what Quinn describes as “first-time runners.” The brand’s high-end shoes and apparel ship only to independent retailers, athletic stores where hardcore runners typically shop. And Quinn said he can’t foresee a time that the company would offer that line to Amazon.
“Through focused distribution and segmented products, there is enough prosperity for everyone,” Quinn said.
Whether that limited selection will be enough for Amazon is another question. There’s no doubt, though, that the company will keep pushing to expand its offerings.
“We’ve talked to every single brand we want to do business with,” Beaudoin said. “It’s not a question of if. It’s a question of when.”
Jay Greene: 206-464-2231 or jgreene@seattletimes.com. Twitter: iamjaygreene