With its scale and scads of shopping data, Amazon isn’t in a bad position as it moves into the upscale fashion business. But if it’s smart, it will learn a few things from the startups already succeeding in the higher-end spectrum of the space.
When asked about how fashion startups could compete with the e-commerce giant at the TechCrunch Disrupt conference in New York, Alexis Maybank, Gilt Groupe co-founder and chief strategy officer, said that Amazon (s amzn) has been and will continue to be a formidable competitor. But she said it has struggled to make an emotional connection with customers.
You can’t show product “without much of a storyline around it,” she said, adding that part of Gilt’s success came from blending glossy, magazine-like content with the shopping experience. She also said that designer brands won’t want to become commoditized on Amazon.
Jennifer Hyman, CEO and co-founder of Rent the Runway, echoed the theme of consumer connection, saying that fashion brands that seem to succeed online – like Zappos (which was acquired by Amazon) – seem to be those that start with the customer experience.
Not that Amazon hasn’t earned kudos – from customers and ratings companies – for its customer service. But high fashion consumers might be looking for (and potentially already accustomed to) a different kind of shopping experience.
Given that just seven to nine percent of retail sales are conducted online, Hyman said, we’re only at the beginning of the fashion e-commerce “revolution.” And the biggest problem, for women’s apparel, at least? Fit.
“People haven’t really cracked the code of, ‘will this look good on me,'” she said, adding that while people are trying to solve it with algorithms, she thinks the solution will be social.
“It’s a psychological problem, as opposed to a scientific [one],” she said. On Rent the Runway, they address this “browsing problem” by letting members search for outfits according to how they looked on other users with similar body types. Warby Parker co-founder Neil Blumenthal said “there’s no way” his company would have grown as quickly if not for its feature that lets users try five different pairs of glasses at their homes for five days before purchasing. (My colleague Ryan Kim profiled the company earlier this spring.)
He also said part of their online storefront strategy has been to combat the brick-and-mortar experience of being overwhelmed with options by giving people an easier-to-shop “tight, curated collection.”
Personalization has also helped Gilt succeed, Maybank said, emphasizing that it can send out 3,000 different versions of its daily email because of its years of collecting data. But, when it comes to data collection and recommendations, we know that Amazon’s in fine shape.