Summarize the article:
Why Fashion Stores Shouldn't Join Amazon's DataBehemoth
Providing Amazon with more customer data will only makethe e-commerce giant an even stronger opponent. Instead, fashioncompanies should embrace the current wave ofconsolidation.
Amazon has conquered the world, one consumer category at a time.Now, it seems the final frontier is the fashion category where thee-commerce giant is yet to prove victorious. But do smaller fashioncompanies stand a chance against the mean, lean shopping machine ifthey go at it alone? It seems unlikely.
This is why there’s a wave of consolidation washing over thefashion world currently. Just recently Michael Kors acquiredVersace and Chanel bought swimwear brand Orlebar Brown.
One of the main driving reasons behind these mergers andacquisitions is a clear need to gang up against Amazon. Even thoughthe companies might not express this directly, all of them shouldbe painfully aware of the world’s second most valuable companybreathing down their necks.
While many major brands have already surrendered to Amazon’sallure of supreme online traffic, brands and fashion stores shouldresist joining forces with the data monster that is ultimately setout to consume them.
There’s no questioning the allure of Amazon and there’s probablyno company in the world better at selling and distributing goodsonline. For the same reason, having their products sold on Amazonwill help fashion companies reach a few extra percentages of saleswithin the next quarter. But what does the end game look like?
With each data set, Amazon will get more acquainted with a newtarget group and perhaps in time, finally understand this wildlydifferent shopping behavior. After all, the fashion shopper is muchmore of a browser than a searcher – a trouble for Amazon which isalmost entirely built on customers searching and finding. Shoppingfor a phone charger comes down to a few variables that are easilylaid out in data: Price and brand. Fashion shopping is a lot morecomplicated. Mainly because the shopper often needs to browsethrough dozens of pictures before becoming aware of his or herpreference as to shape and color.
At first glance, this behavior makes the fashion shopping seemmostly random, something humans is still far better at making senseof than algorithms. But in the end, even the more delicate detailsof online fashion shopping can be broken down into delicate data ifAmazon gets enough samples from fashion companies joining theirranks.
This will only help the Amazon data monster grow stronger and bytime, absorb all the smaller fashion companies, one data set atime. And it has been reported that Amazon directly uses the dataagainst Marketplace sellers by selling the most popular productsthrough its service. Conversely, when fashion companies joinAmazon, they lose access to their customer data and will only gainaccess through substantial payments.
Instead, fashion companies should consider standing their groundand consider the path of consolidation. The path towards victoryover online giants seems impassable by the small players sincescale in production and distribution is paramount forprofitability. But through consolidation, fashion companies mightjust be able to create the scale needed while at the same keepingaccess to their data.
