Every week, The Interline analyses one or more vital talking points from across the landscape of fashion technology news. This analysis is also delivered to Interline Insiders by email.
Major players in eCommerce are trading blows, but the playing field could be shifting thanks to technology.
This week saw a glut of what, on the surface, is not good news for Amazon’s online retail business.
First came an analysis of how top marketplace sellers are now outgrowing their origins as creators of convenient, third party products that tapped into Amazon’s distribution network, and becoming recognisable brands in their own right.
To date this phenomenon is mostly confined to consumer electronics and wellbeing brands (including Anker, which went public last year after trading solely through Amazon for the best part of a decade), but from the pool of apparel and footwear sellers that have continued to retail through Amazon, it’s likely to be only a matter of time before a similar success story emerges in fashion.
At that point, the brand will face a similar question to one that many other brands have asked themselves: do we want to continue to sell through an e-tailer, or would we prefer to obtain, and exercise, greater control over our consumer relationships?
In one sense, this would be a victory for Amazon, with publicity built around the idea of its platform as a launchpad for successful businesses. In another sense, it belies a deeper idea: that, for many brands, selling through Amazon is seen as a necessary evil until their own direct to consumer ambitions can be scaled.
Framing it this way brings us to the second story of the week: the suggestion that Shopify (across all its merchants) may now have passed Amazon in monthly customer traffic for the first time. While there is no suggestion that Shopify is as large as Amazon in any other sense – the latter’s revenue and reach are still unmatched – this does raise the possibility that more brands will choose to use Shopify’s off-the-shelf platform before reaching the tipping point of growth that triggers complete ownership of the DTC channel.
Thirdly, this week saw a new bill signed in California that would prevent businesses (expressly warehouse and distribution centre owners) from setting productivity quotas that contravene existing workplace health and safety laws. This is an accusation that has been levelled at Amazon before, and in light of last week’s analysis of the sheer amount of effort and investment that is being deployed towards automating distribution and last mile delivery, this could be one of the final straws that can layered on top of the people-focused model of mass online retail.
All of which is potentially part of the reason that Amazon appears to now be making a lot more of its initial outreach into physical retail. This week the Wall Street Journal published an examination of Amazon’s plans for one or more physical department stores, which would likely leverage its touch-less payment technology alongside other methods of seamless automation.
The rumours and insider sources quoted in that article indicate that a physical Amazon outlet would offer a “non-traditional shopping experience” – something that, in all likelihood, means a shopping experience that’s enabled to a significant degree by technology.
As a result, The Interline expects that we will soon see an arms race towards technology for physical retail that could surpass the one Amazon started – and has been fighting for more than a decade – online. And in that scenario, in-store technology could be about to get a lot more interesting.
And the best from The Interline this week:
This week saw the publication of two exclusive articles on very different subjects.
The first was a brand-new opinion piece from our Editor, examining how a discrepancy is growing between the world’s demand for inclusivity, equity, and diversity, and how AI systems are accidentally perpetuating bias.
With input from Parham Aarabi of HALT and The University of Toronto, this long-form piece makes a strong case for fashion to put guardrails around its uses of machine learning before risking undermining essential inclusivity strategies.
Second, we published The Interline’s first collaboration with NYC-based Modern Mirror, which looked at how fashion retail – especially at the luxury end of the market – is seeking to create deeper, more lasting experiences with smaller numbers of customers.
As this week’s news demonstrates, the retail landscape is anything but stable. And predicting how far footfall is going to return to physical stores is difficult – although having objective data can help – meaning that every in-person interaction counts. In that situation, is commoditised technology the answer? We set out to answer that question.
