Amazon Plays Its Next Hand: Clothing Stores

After piloting its retail tech at Amazon Goairport-based convenience chainssalonsgrocery, and even Starbucks, Amazon has made the next move: clothing stores. It has launched Amazon Style and the first manifestation is a fashion outlet in Glendale, CA, which held its grand opening last week.

The store features a digital-first shopping experience that lets customers choose items and style/color variants on digital touchscreens throughout the space. Once they select an item they can add it to their digital cart which sends the item to a physical fitting room or checkout counter.

In addition to the larger volume of inventory that can be displayed in these digital shopping formats, there will be a selection of physical clothes on display. This will be done to accommodate traditional habits and the shoppers that want to browse aisles in pre-Covid style.

Amazon Advances its RaaS Play with Starbucks

Digitally Infused

Speaking of physical shopping, even these components are digitally infused. When shoppers see an item they like, they can scan a QR code using the Amazon Shopping App to choose size and color variants. They can then send items to the fitting room. The app even opens the fitting room door.

In all cases, the shopping flow blends the best of online and offline commerce. The “endless aisle” benefits of e-Commerce are present, along with the IRL ability to try things on. The only eCommerce benefit missing from this equation is shopping from your couch… but life is full of trade-offs.

As for the products carried, Amazon says the store offers hundreds of brands that are chosen based on both expert curation and algorithms. The former will rely on fashion influencers and experts, while the latter will logically tap into Amazon’s online sentiment engines (think: “best sellers”).

In all the above, it’s worth acknowledging that the shopping flow is at least partly driven by Covid-era demand signals. That flow involves minimal human interaction or handling apparel. For example, eCommerce-like touchscreens (though they involve “touch”) reduce human physical interaction.

In the Crosshairs

Panning back, as we’ve predicted, Amazon will continue to expand into more retail categories. Its latest clothing-vertical experiment joins the growing list of vertical conquests including convenience, grocery, salons, and coffee. The question is what retail (or food) category is next up its sleeve?

As background for those unfamiliar, one of Amazon’s ongoing conquests is retail-as-a-service (Raas). Partly to expand its business and diversify revenue, the idea is that it can bring its signature logistics and streamlining tech to retailers. It’s hoping this grows its business in similar ways that AWS did.

This includes its “Just Walk Out” technology that was incubated in Amazon Go stores before spinning out as the centerpiece of its RaaS play. Separate from the above innovations, it uses computer vision to track items as you shop and charge you automatically, thus avoiding checkout bottlenecks.

Beyond the cashierless component, Amazon’s retail tech continues to evolve into other digital infusions like Amazon Style. Benefits include better customer flows throughout a store; convenience (thus loyalty); and cost-efficiency. The latter enables Amazon-style aggressive price competition.

After all, Jeff Bezos likes to say, “your margin is my opportunity.” This is what he’s talking about. And retail is next in his crosshairs for disruption.

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