Amazon is cranking up the pressure on Canadian fashion retailers. The ecommerce powerhouse has launched a clothing and shoe store on Amazon.ca, adding 1.5 million items for women, men and kids.
In the new section, Amazon is featuring well-known brands such as Levi’s, Puma, Dockers, French Connection and Speedo. Alexandre Gagnon, country manager of Amazon.ca told Canadian Press more fashion lines will be added in the future. “Ultimately we want to have the biggest offering possible for our customers, so that list, hopefully, will be constantly evolving and growing,” he said.
Should Canadian fashion retailers be worried? Marketing asked three experts to weigh in on Amazon’s move into clothing and to give retailers some advice on how to compete.
Ed Strapagiel, retail consultant
Fashion retailers should consider this as just one more online move into their territory, albeit a fairly significant one. All bricks and mortar retailers have been concerned about online competition for years now, so Amazon getting into the game should not come as a surprise.
A particular concern, however, is that in the past Amazon has shown that it’s quite happy to operate at a loss to get into a new market and/or quickly gain market share. It’s tough to compete against an operation with such deep pockets.
The lower- to mid-price casual wear end of the spectrum is likely to be more affected because it’s more accessible to ecommerce vendors. When consumers buy at the mid to upper end, like a $750 pair of shoes, they’re more likely to want to go to a physical store to make sure they get exactly what they want.
Another threat is some of the larger bricks-and-mortar-based operators like HBC expanding and improving their online capabilities. Other Canadian fashion retailers have to up their online game as well. It’s no longer a world of “build it and they will come.”
To compete, Canadian retailers can also offer exclusive fashions. This does not necessarily mean high end, just stuff people can’t get anywhere else. But to get the word out, these retailers are going to have to get good at online. With this approach, it’s more difficult for consumers to price compare, and the retailer doesn’t have to be continuously handing out discounts, which undermine their profits.
Rob Cameron, chief product and marketing officer, Moneris Solutions
Any Canadian retailer without a laser-like focus on competitiveness should be worried—but not only about Amazon. That’s not to discount the fact that Amazon is a formidable force. The company brings a large customer base, sophisticated distribution network and has instant brand recognition. Amazon’s move into clothing and shoes will intensify the pressure on rivals in Canada.
Canadian expectations toward Amazon around selection and price will be high, in large part because it’s easy to comparison shop between Amazon’s U.S. and Canadian platforms. Amazon will have to provide a comparable offering, and have no doubt looked at Target’s failure in Canada and made a list of mistakes to avoid.
At the same time, Canadian retailers would be wise to increase their selection and negotiate with suppliers for prices comparable to those in the United States. In addition, they must build websites and ecommerce around convenience, security and customer experience.
Canadian retailers can take inspiration from Amazon, which offers fast and inexpensive shipping and has made it nearly effortless for repeat customers to make purchases. But, what they really need to understand is that brick-and-mortar stores and ecommerce are not mutually exclusive. Retailers need to be active and payment-ready in all channels. They can follow the example of Canadian brands like Indigo and Aldo, which have mastered the art of growing their ecommerce business while creating an in-store experience that keeps customers walking through the front door.
Competing with Amazon will be no small feat, but with the right combination of pricing, selection and customer experience—online and offline—Canadian retailers will continue to find success.
Maureen Atkinson, senior partner at J.C. Williams Group
Any time Amazon gets into anybody’s business, you should worry.
To compete, retailers definitely need to be online. And they have to evaluate whether there’s a reason to put their stuff on Amazon. If they feel they’re going to get a lot more traffic by becoming a partner on Amazon for apparel, then it may make sense to do that.
The challenge for Amazon is clothing is not what they’re known for. It’s also interesting looking at features like their ratings. They have fewer people doing ratings [in apparel] because those items change. It’s not like a book that’s listed for five years and gets a lot of ratings. The advantage for Amazon is they have huge traffic and benefits like Amazon Prime [which offers two-day shipping]. If somebody is an Amazon shopper, they would naturally be looking at the apparel as well.
I think a lot of people think apparel is not necessarily bought online, and that’s not the case. In our Canadian E-tail Report, we see that around 20% of what people say they spend on apparel, they spend online. Not all of it goes to Canadian retailers—some of it goes across the border. And maybe that’s a good thing here [with Amazon.ca]. Having the items come from Canada may recapture some of those sales.
