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Aisling O'Connor: Is Amazon.com a welcome guest at fashion’s table?

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Amazon shoulder to shoulder with Vogue and Prada

Amazon shoulder to shoulder with Vogue and Prada

Jeff Bezos and his wife on the 2012 Met Gala red carpet

Jeff Bezos and his wife on the 2012 Met Gala red carpet

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Amazon shoulder to shoulder with Vogue and Prada

AMID the hundreds of flashing blubs and glittering celebrities and designers at the Met Gala in New York on Monday, an unlikely guest stood next to Anna Wintour at the top of those red carpeted steps.



Known as the ‘East Coast Oscars’ and ‘Fashion’s Prom Night’, The Metropolitan Museum Costume Institute Gala is an annual showcase of high-fashion talent, and a parade of A-List glitterati. The event is organised Vogue, headed by its editor-in-chief Wintour, and was formerly co-sponsored by Chanel. This year however Anna’s right hand man was not Karl Lagerfeld, but Amazon.com founder and CEO, Jeff Bezos.

Amazon’s sponsorship of this great sartorial spectacle had many a fashion watcher scratching their glossy topped head, and many a fashion retailer reaching for the gin. Since 1995 the online retail magnate has changed the face of books, electronics and toy markets and, until recently, merely dabbled in clothing, shoes and accessories.

Although Amazon has been making ways in fashion retail, with the acquisition in 2006 of mid-luxury fashion retailer shopbop.com and mega shoe hub zappos.com in 2009, the company had small offerings in the clothing market by comparison to its cash cow departments. 2011 saw the launch of a private luxury flash-sale site myhabit.com and a 40% increase in Amazon’s revenue – clearly there was a strategy in play, and Bezos had the cash and commercial influence to make his next move.

The Met Gala sponsorship is estimated at €1 million - a steep fee it seems, but consider the impact such an alignment makes on the fashion industry. Esquire’s Kurt Soller succinctly remarked, ‘instantly inserting themselves into the fashion conversation’.

The media is talking and the wide consensus is that Amazon is not a welcome guest at fashion’s table, for fear it will become the host. Bricks and mortar luxury department stores and high end designers face a market changed by a company that can not only buy entire collections wholesale, without sale or return conditions, but whose logistics enable cheaper costs to the consumer with free shipping.

Amazon’s ability to give brands huge orders is a tempting prospect. Very few retailers can buy an entire collection. Amazon can do so and in turn can negotiate to set its own prices as opposed to following the label’s own recommended price-tags.

The growing hostility to the potential cheapening of high-end consumer goods is compacted by Amazon’s perceived low-rent look. Bezos answers these concerns with a commitment to maintaining its partner brands’ prestige, promising no race to the bottom and a glossier home.

In order to compete with the likes of luxury e-tail giant net-a-porter.com, Amazon hired former Barney’s New York fashion director as a consultant and brought on stylists, hundreds of new high-end brands including Catherine Malandrino, Michael Kors and Kevin Spade, and invested in new photographic technology to give the consumer a plethora of views of each garment. If the myhabit.com glossy magazine editorial look is an example of where they are going aesthetically, it won’t be long before Amazon will truly earn its credentials from the fashion consumer.

Such is the mystique and near impermeability of the high end clothing market, Bezos has for the first time warranted hard copy advertising in magazines such as US Vogue. A partnership with Vogue is the smartest decision he could have made. Anna Wintour has a Midas touch and is known to mentor her partners and champion her advertisers. Her seal of approval and sway with top designers will go a long way to securing the right brand portfolio for Amazon’s updated department.

The fall-out for traditional stores looks to be significant, but it was going that way even without Amazon. Although many media talking heads speak of the consumer needing the tangible experience with high end products, research would say that online shopping is stealing market share in double digits year on year. Even in recession afflicted economies, e-commerce and m-commerce are stunning economic watchers. Italy showed 38% growth in online clothing retail in 2011 and 210% in m-commerce across the board.

As for Ireland, according to Mintel Market Research Irish consumers are sacrificing luxury in favour of price, but are not willing to commit to lower quality to save money. Although the Irish uptake on online shopping was slow to start – most likely due to broadband availability issues but also owing to the fact that most foreign-based online retailers don’t deliver to Ireland.

The Irish consumer has stuck to traditional retail simply out of lack of opportunity. Amazon’s targeting of mid-range brands and lower end luxury, will likely tease shoppers out of Irish stores to wider choices at lower prices online. This is definitely good news for Amazon, but not all bad for Irish tax revenue and jobs.

The Irish fashion industry could look at Amazon’s onslaught on fashion e-tail as an opportunity, rather than a threat. Amazon has the potential to sell huge amounts of Irish goods abroad, to growing niche and luxury goods markets in Asia. Home-grown artisan and design is hugely popular overseas and Amazon has the set up to become a giant in Irish goods promotion and export.

Seeing Amazon replace Chanel as Met Gala sponsor is indicative of a change in where the money is and where wider markets are going. The likes of super high-end luxury French brands Chanel, Louis Vuitton, Hermes and Balenciaga may never grace the pages of Amazon, but is certainly sharing the pages of Vogue.

Amazon is after a piece of the pie, and has the money, the goods and now the integrity of Vogue in its war chest. Given the website’s reach of more than 600 million annual visitors, before a wholehearted stab at fashion, it may not be a point of if Chanel and co. gets on board, but when.

Aisling tweets @ashinyoconnor