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Having mastered the art of selling an extensive range of essential goods, Amazon now has its eye on the fashion industry. Its journey in this sector started in 2012 with its first fashion advertisement and a catchy tagline – ‘Smart is beautiful’.Having mastered the art of selling an extensive range of essential goods, Amazon now has its eye on the fashion industry. Its journey in this sector started in 2012 with its first fashion advertisement and a catchy tagline – ‘Smart is beautiful’.

Since then the giant marketplace has come a long way. It now boasts top designer clothes and the launch of its own fashion lines.  And while the fashion industry is often seen as fickle and difficult to predict, the sector was estimated to be worth $2.4 trillion in 2016. This makes it a significant growth source for Amazon.

In 2016, Amazon’s apparel sales in the US saw a 25 per cent increase. To put things into perspective, the American fashion market only reported 3 per cent year on year growth.

Amazon Wardrobe

To reach an even larger audience and increase its appeal with millennials, the company also launched Amazon Wardrobe, a subscription service for Prime customers. Wardrobe enables them to order various apparel items from Amazon’s lines as well as independent labels like Adidas, Calvin Klein, Levi’s, Hugo Boss and others.Shoppers can order shoes, clothes or accessories with no upfront charge, only paying for what they decide to keep. There’s a  three item minimum order size, in exchange for which they have seven days to decide what they don’t want.

To minimise the hassle of returns, Prime Wardrobe shipments will come in a resealable box with a prepaid label. This will be a familiar experience for customers used to shopping with Asos and similar online apparel retailers.

Amazon is aiming to reduce the cost of returns by effectively bringing an in-store fitting experience into Prime members’ home by offering additional discounts – if the shopper decides to keep three of the ordered items, they receive a 10% discount. Should they keep five or more, then they save 20%.

But what does this aggressive Amazon campaign means for independent commerce fashion retailers and third party sellers? 

If they want to remain competitive and thrive, online fashion retailers need to shift up a gear and make sure that they offer:

A high quality customer experience. Nowadays retailers have a wealth of data at their disposal. Tap into that potential and use the data to create personalised offers.

Smart promotions and bundles. Retailers can struggle with over-reliance on discounting. Smart promotions and interesting bundles that make shopping for certain items easier and faster could give you a significant competitive advantage without sacrificing margin to the same extent.

Fast, free deliveries. Today’s consumers are highly demanding. They expect to receive orders quickly and return items they don’t want for free and without hassle. Evaluate your logistics, uncover bottlenecks and areas that need improving, and make sure that you offer fast, convenient deliveries.

The fastest way to finding a loyal audience is to occupy a niche, and become the ‘go to’ provider for your target market. That drives consumers to come directly to you when they need specific items.

Alternatively, you can go broad instead of narrow, and rely on a high-traffic, high-velocity model. This option requires you to find high quality suppliers and offer a wide variety of apparel items that appeal to a broad audience and a mix of fashion trends.

The ecommerce industry (especially the fashion sector) moves at light speed. If you want to keep up and grow your business, you need an automated solution that takes the burden of manual tasks off your shoulders and empowers you to focus your efforts and resources on uncovering or setting new market trends.

The technology supporting commerce has evolved tremendously in recent years and now you can easily find a smart, reliable ecommerce platform that increases your effectiveness and your margins by automating your multichannel business, from purchasing, supply, inventory and stock levels to orders, fulfilment, dispatch, refunds, returns and customer service.

If you follow the niche model, you need to understand exactly which product lines are effective for you, and where you can best place them in terms of channel, geography and pricing. To cut the guesswork and increase efficiency you need to access the built-in data and analytics within your ecommerce platform.

For a high-velocity, high-volume model, you need a reliable and slick warehousing operation that integrates seamlessly with the rest of your business to keep costs low and margins to a maximum.

Whatever strategy you follow to grow your business, keep in mind that you are facing aggressive competition and you need to put customers at the heart of your development plan. Their behaviour can change rapidly and you need to stay on top of customer habits to make sure you are ahead of the market and competitors.

Paul Watson is CEO of Volo Commerce www.volocommerce.com

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