Big tech investor tells fashion industry not to trust Amazon
16 Dec 2020
The pandemic ups and downs of Amazon have been well-documented. There were accusations of the ill-treatment of workers in its fulfillment centers. According to a report by the Wall Street Journal, the retailer has gathered data from sales of third party vendors to create competing products, despite its representatives having long denied engaging in the practice, even when appearing before congress. Amazon’s private label business of apparel, footwear, and jewelry includes 111 different labels and 22,617 products, according to report from Coresight Research, while, according to Bloomberg’s Billionaires Index, as the pandemic drove consumers online and directly to Amazon, Bezos’s net worth climbed from 125 billion to 143 billion dollars in the three weeks between April 12 to May 5. Meanwhile, the EU opened a formal investigation based on preliminary fact-finding to determine whether Amazon was abusing its position selling its own product while operating a market place for independent sellers.
Anti-trust investigations have gained steam in the last few years as big tech companies like Facebook, Apple, Google, have finally come under scrutiny for monopolistic and unregulated behavior. But why should the fashion industry be worried about Amazon in particular?
“These guys won’t kill you tomorrow, but they will kill you in 5 years,” says Roger McNamee, former mentor to Mark Zuckerberg, early investor in Facebook, and co-founder of Elevation Partners, addressing the global audience at the Business of Fashion Voices 2020 summit. He had got our attention.
For several decades the fashion industry has seemed to be in the thrall of big tech, stunned by the innovation and the warp speed of progress to the point that it may have lost its own vision. Some members of the luxury sector initially attempted to keep Amazon at arm’s length. Jean-Jacques Guiony, CFO of LVMH, said in 2016, “We believe that the existing business of Amazon doesn’t fit our luxury, full stop, but also doesn’t fit with our brands. If they change the business model, I don’t know, but with the existing business model, there is no way we can do business with them for the time being.”
In hindsight, one can’t help wondering why fashion’s power players––LVMH, Richemont, Kering––didn’t form an alliance to compete with the Silicon Valley biggies and perhaps build their own platform? How could they let Instagram steal in to become fashion’s favorite runway?
Surveillance capitalism and the fashion industry
Amazon’s business model which essentially determines that a tube of toothpaste and a cashmere cardigan are basically the same goes against the long held creed that a luxury product is elevated, special. But it is also a model that relies on what has become known as “surveillance capitalism,” the practice of tracking our every move for profit, and increasingly considered to be an assault on human rights, a threat to democracy, a coup.
While the LVMH statement might have momentarily stung, it wasn’t going to deter Bezos whose sights were set on high fashion. Having already co-hosted the 2012 Met Gala with Anna Wintour, he went on to co-sponsor New York Mens Fashion Week with the CFDA. This year, just before the pandemic halted all activities, Bezos mingled again with Anna Wintour and luxury fashion’s elite at Paris Fashion Week, and rumors began to swirl that Amazon was plotting the launch of a luxury fashion platform to rival Alibaba’s Tmall. Then, in May, a New York Times headline trumpeted, “Amazon to the rescue of the fashion world!” at the launch of a new temporary storefront to provide aid to the pandemic-beleaguered US industry, named Common Threads: Vogue x Amazon Fashion, and selling cooler, contemporary labels such as Batsheva Hay, Anna Sui, Public School, 3.1 Phillip Lim, and Derek Lam’s 10 Crosby. A “thrilled” Anna Wintour declared it “an important step in the right direction.”
But McNamee says fashion’s most powerful have been looking for answers in all the wrong places, and believes the industry needs to practice some self-defense: “You have the ability to influence culture and trends. Do not concede,” he warns. “Stop thinking Instagram will save you from Facebook, Tiktok will save you from Instagram…Don’t blindly follow everything little thing the [tech] industry does.”
No doubt the pressure felt by small or independent brands to sell on Amazon, especially during a pandemic when they have a backlog of existing inventory, can be enormous given Amazon’s logistics prowess and customer breadth. But at a time when brand storytelling is one of the smartest tactics for success, McNamee says the tech companies “have inserted themselves between you and your customers.” Last year, sportswear giant Nike, often ahead of trends, pulled its product off Amazon to focus on its Direct-to-Consumer business after a 2-year pilot partnership did not meet expectations.
Our reliance on Amazon stems from the fact that its product has come to be seen as packaged with the promise of convenience, the illusion of support, all beribboned with speed and ease of returns. Amazon can seem to anticipate our every desire, liberating us to get on with our lives.
“Personalization is a ruse,” says McNamee, “it’s not freedom.”
Amazon, like Google, Facebook and Apple, scoops up the digital breadcrumbs browsers leave behind as they meander across the internet, however far away from those sites that meander might lead, and they add the findings to the bulging digital file they have on each of us. Fashion is about developing personal style, and going rogue in pursuit of individuality is its strength. Whereas individuality is held in contempt by algorithms and predictability metrics. In fact, these big tech puppet masters require a level of consumer inertia for them to continue to thrive. The more our behavior can be manipulated and fine-tuned to conform to algorithmic trends and results, the more success Amazon achieves. The more we shop on Amazon, the fewer alternatives to Amazon remain. Jeff Bezos’s interest in fashion centers on reducing individuals to clones, encouraging a herd mentality in shopping, gobbling up competition. By clicking on one of Amazon’s wardrobe suggestions, pressing Buy Now, we are not so much purchasing an outfit as an outcome. We are not style icons but math equations.
Amazon fashion and the death of personal style
“Everyone you know is buying this Amazon coat,” crowed Glamour about Amazon’s Orolay multi-zippered down-lined parka, which, priced at 140 dollars, became as ubiquitous as a meme during the winter of 2017. It led to the existence of an Instagram site called theamazoncoat, features on CNN and a spot on Oprah’s Favorite Things, a 2020 maxi version launch, and over 13,000 reviews. These outerwear consumers, while well-insulated, can zip it with any claim to individuality.
The fashion industry might have backed itself into the enemy’s awaiting clutches and the pandemic has further complicated matters. Fashion has elevated the very voice that seeks to silence all conversation. But McNamee believes that fashion is overestimating its need for big tech. “You have something these companies don’t have. You have heart, you have culture,” he says. “People want to hear what you have to say.”
It’s a mobilizing sentiment, no doubt. But systemic change is not without hurdles and the industry will have to make short term sacrifices, even lose a few seasons’ worth of profit, for its long-term health. But for big tech companies, these one-time darlings of innovation whose goal was disruption without consequence using whatever means necessary, the tide of opinion is turning. Legislation will force change and that’s where we need to turn our focus.
“I’m really optimistic the fashion industry can help get us out of this,” McNamee addresses our industry. “You’re in the culture business. Other industries want to help. Use your voice.”
Image: Jeff Bezos, Amazon Corporate
Fashion editor Jackie Mallon is also an educator and author of Silk for the Feed Dogs, a novel set in the international fashion industry