Amazon enters High Fashion

Source: NYTimes, May 2012

“It’s Day 1 in the category,” Jeff Bezos, Amazon’s chief executive, said in a recent interview. Though characteristically tight-lipped on bottom-line details, Mr. Bezos said the company was making a “significant” investment in fashion to convince top brands that it wanted to work with them, not against them.

The traditional retail world — and many major brands that want no part of Amazon — are gearing up to fight for their lives.

“It has the latitude to set prices and charge whatever it wants,” Sucharita Mulpuru, an analyst for Forrester Research, said of Amazon. “That is a huge threat for brands.

Amazon’s decision to go after high fashion is about plain economics. Because Amazon’s costs are about the same whether it is shipping a $10 book or a $1,000 skirt, “gross profit dollars per unit will be much higher on a fashion item,” Mr. Bezos said, and it already makes money on fashion.

Amazon’s considerable computing capability, for example, has been turned to fashion and the analysis of enormous amounts of shopping data. The company has also made a “disproportionate” investment in photography, said Cathy Beaudoin, the president of fashion for Amazon. The photography studio, in Kentucky, can shoot more than two images a minute, allowing the company to post new items daily on the Web that were photographed hours earlier.

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