This week Amazon took the wraps off a new incarnation of its Alexa voice assistant, giving the AI an eye so it can see as well as speak and hear. The Echo Lookalso contains a depth sensor thats being used, in the first instance, tocreate a bokeh effect for ahands-free style selfies feature that Amazon is hoping willsell the deviceto fashionlovers, by making their outfits pop out against the bedroom wallpaper, and making themmore eager to socially share.
The Echo Look app is where users can view the style selfies (and videos) theyve asked Alexa to recordfor them (sheindefinitely stores a copy for Amazon too). But the flagship feature of the app isa fashion feedback service, calledStyle Check, which Amazon says will utilizemachine learning to ratefashion choices and help users choosebetween outfit pairs. And ultimately, presumably, givetheir entire wardrobe a score. Albeit, the featureis using(human) stylists too, at least for now, to help train what Amazon surely hopes will beentirelyrobotic style recommendations down the line.
The app will also suggest clothes for users to buy based on their style selections opening upanother revenue stream forAmazon, and one that could prove pretty sticky if Echo Look delivers on itspromise of furnishing userswith a personal stylist whose killer feature isthe ability to shop tirelessly on yourbehalf. This new voice-controlled,Internet connected Echo camerais designed tocondition usersto feedit with the training data Amazon needs to builda fashion savvyAI. As data grabs go, its exceedinglywell dressed.
As I wrote in July 2015, adding a camera to Echo makes perfect sense for Bezos massive fashion ambitions. With an eye to see you, Echo Look promises to contain yourself-image better than a mirror by claiming to knowwhich of your outfits is the fairest of them all. Fashion is often sold as something feel good andconfidence building a way to belong and blend in within a peer-group. But equallystyle can be deliberately different;the essence ofindividual self expression. So whether theres an AI that can usefullycater to all those differentfacetsremains to be seen. But for many shoppersthe primary desire they havefor the clothes they wear can be boiled down to looking good. SoAmazon is positioning Alexato sell that hope as a service.
Buying clothes is a recurring need; both a practical necessity anda way to keep up with changes instyle and taste. Like buying groceries, its a type of shopping without end. Whichis why Amazon is fixated onboth spaces. In order to be a $200bn company weve got to learn how to sell clothes and food, Jeff Bezossaidas long ago asa decade displaying the long term thinking that has enabled the ecommerce giantto slow-grow its business over more than 20 years from an upstart online booksellerinto todays sprawling digital marketplace whose upwardly thrustingarrow declaimsits mission to deliver everything.
From household staples to fashion destination?
Amazon Prime is the membership club that sells a subscription toconvince peopleto lock themselves in to buying more and more from Amazon. Notably, a recentaddition to the Prime perk list is anAmazon own brand mens dress shirt brand, called Buttoned Down. Here the companyis selling wardrobe staplesthat, if they bore a different label, would cost a whole lot more.
And while a fairlyuniform garment like a dress shirt can makean easy recurring purchase, i.e. once youve figured out which size fits you, a lot of fashion is intentionally far less predictable. Meaningtheres a muchgreater need for style-related try ons. Female fashion especially falls into this category hence Amazon heavily focusing themarketing for Echo Look on women
Amazons vast strength is how its various parts link and pulltogether (like Prime) to build lock-in byembedding more and more utility into the core platform. SoEcho Look which at first glance might seem a bit of a niche product (at least from a male perspective) is designed to lay importantgroundwork for Bezos big bet on fashion. The company has already launched a swathe of its own clothes brands in keymarkets. Now, givingAlexa thegift of sight, opens the opportunity for Amazonto get a far more intimate perspective onhow its customers think about fashion as they try things on in the privacy of their bedroom asking Alexa to be their fashion judge.
At the same time the Echo Look aims to shift how Amazon users experience fashion buying via the marketplace. This latest Alexa-enabledincarnation means Amazon is no longerprimarily a vast, impersonal warehouse thathastobe manually data-mined to unearth threads youwant to buy; rather it becomes a style destination in its own right; an app thatssavvy about fashion trends and understands personal taste so it can do the leg work and shop for you. At least, thats the pitch and the promise.
The ecommerce juggernaut that Bezos controls Amazonsmarket cap is now a staggering $439 billion hasnot merely been growing in momentum and marketshare because of the hugeinventory it aggregates and makes discoverable in myriad different ways. But, at least in key markets, because ithas fixated ondelivering convenience at faster and fasterspeeds buildingdistribution and shipping infrastructure that can all buteliminatethe practicaldifference between buying online vs shopping in store. Its not quite instant gratification but in some cases Amazon ispushing very close indeed with one-hour delivery in some urban areas fora sub-set ofproducts, andeven delivery within 15 minutes viaits experimental Prime Air drone trials(and eveneyeing somecrazierdeliveryideas than those).
Amazons ecommerce imperativeisto work towards excising the middle ground andgoing direct to thecustomer where the most money is to be made. In fashionscase thatnot only means luring consumers away from retailers bricks and mortar stores but, increasingly, moving in on the fashionlabels themselves. After all, manyclothes arent bought principally or specifically for the label they bear, but for the utility or passingcolor they offer. Amazon wants and clearly feels it can dominatethose types of clothing purchases.It has the scale, ambition, speed and data to cut itself a very sizable chunk of the fashionmarket, reckons Tom Adeyoola, founder of UK fashion tech firmMetail which has been working on rethinking theonline fashionbuyingexperience withvirtual fitting room and garmentdigitizing technologyfor almost 10 years.
Not just basics and low cost garments that might otherwise have been purchasedat a supermarket but High Street fashion, glossy catalogue brands, and other online clothes retailers. Amazons own brand ambitions on the fashion front look almost absolute. At this point itsown brandfashion labels include: womens fashion(Lark & Ro, Society New York) and accessories (North Eleven); childrens clothes (Scout + Ro); mens suits (Franklin Tailored) and dress shoes (Franklin & Freeman). Workout clothes are also apparently incoming.
I think the industry has been very complacent because theyve said nobodys going to buy fashion on Amazon, saysAdeyoola. Youll buy cameras and stuff but youll not buy clothes. But theyre forgetting that Amazon thinks in five to seven year timeframes. Theyve got all the customer relationships, and theyre good at data, and theyre good at logistics, and theyre good at inventory management Amazon went from zero [in clothes sales] to number one in the US in four years.
Itsnot hyperbole to say many fashion brands and retailers arefacing a doomsday scenarioif Bezos is abletorealize the scale of his sartorialambitions. After all, the difficulty of being abrand trying to make yourself heard and monetizeon someone elses platform is already writ large in the smartphone space, where big name brands are boxed into same-sizeapps, competing with each other fordiscoverability and diminishing attention returns while the platform mastersits above the fray, controllingaccess and crucially knowingwhat the user reallywants.
Adeyoola says the retail opportunity Amazon is closing in on is the huge wastefulness of the traditional supply chain, where healthy profit margins are squandered with poor inventory management in turn a consequence of afailureto understand the transformative power of big data.
In clothing RRP, in general, the starting point of margin is towards 80 per cent. So manufacturing is only about 20 per cent of that cost. But all of the retailers are making around, at best, three per cent profit. You look at somebody like Asos in the last four or five years, theyve more than doubled sales but their absolute profit number is the same. Theyve added sales for no profit. So Amazon can look at this and say: hold on, youve got 80 per cent profit and you waste it all this is our opportunity. Talk to a manufacturer and theyll say that inventory management and everything to do with data is where the retailers are just lazy. Theyve been lazy for too long. And thats where Amazon is really good. So, in my mind, I look at it and say Amazon could double manufacturing cost, take their standard five per cent or less margin and still be half the price of everybody on the retail market.
Amazon can look at this and say: hold on, youve got 80 per cent profit and you waste it all this is our opportunity.
Even if Amazonsconsumer frontdoor has remained fairly consistent (at least until the original Echo popped up), Bezoshas spend years honing backend infrastructure and tooling up supply chain expertisein the areas hewantsto dominate positioning Amazonto be able to offer a more compellingly priced product than high street fashion retailers andstill make its margin. Sowhile retailers continue to waste money on inventory management, Amazon is aimingto use data to eliminate inventory entirely.
Earlier this month, for example, it was awarded apatent for an on-demand clothes manufacturing warehouse that suggests an intent topush the boundaries offast fashion even further. Amazonsend game looks very much likegarmentsmade on-demand, locally at the point of order vastly shrinking its warehousing and shipping logistics costs in the process. Amazon couldseed data-fed, just-in-time manufacturing hubsin urban centers toservice demand locally, enabledby knowing exactly what itscustomers want, arguesAdeyoola.
Theres just much less friction, he says of theAmazon approach. So sure they dont have a great consumer user journey now, but they will do and in the interim theyve been doing, effectively, what were trying to do, which is digitize the world. Theyve been accumulating all the brands and all the clothes, and getting them onto the system and then learning and understanding where the white space is.
Hepoints tob2b apparel maker theTAL Group, which claims to make one in every six mens shirts sold in the US. But the question is, for how much longer? While its button down dress shirts are priced by retailer partners at $80+, last month Amazon launched their own brand (the aforementioned Buttoned Down) selling shirts starting at$40. Thats calleddisruption, Jeff Bezos style.
Andwhile Amazon has been using data to optimize itssupply chain for years, traditional fashion retail and brands are still saddled managing networks of bricks and mortar stores where theyre seeing falling footfall. These physical locations have arguablyconvinced retailersto view the Internet asjust another sales channel, rather than the vital data pipe needed to overhaul all their business and supply chain processes in order to survive as mobile platforms consume their world.
Again, you could draw a parallel with a former smartphone giant like BlackBerry fixating on its physical Qwerty keyboardas a new generation of app-focused touchscreen devices swept in to change everything. Even if some fashion retailgiantstechnically have the scale andresources to adapt to the big data era, none apparentlyhas the long term convictionto take the plunge which is enablingAmazon to pushin and sew upmarketshare.
I think the trend is very straightforward, saysAdeyoola. In the old days of retail, the battle was for footfall in a shopping mall, footfall on a high street. Now that traffic is time on a phone. So if you think about it in those terms, the channels where retail is going to happen are going to be in those places which have the most time on your phone. So all of the guys who take up the most time and have those customer relationships are going to be those new retail channels so it is going to be Amazon, it has to be Facebook, it has to be Google, it has to be Apple. Those guys are going to be those portals through which youre going to do retail, because thats where you spend all your time. And all the retailers that have been spending their time building their own websites and building their own apps you cant fight You will be like a shop in a shopping mall and the shopping mall is just going to be the Amazon app,the Facebook app. And hence the middle retailers just wont exist. Youre going to have to have a real battle to position yourselves in terms of what are you about.
Plus, remember the Echo Lookson-board depth sensor? Such hardware could be used to size up peoplesfull length selfies, enablingthe AI toautomatically know its owners size and recommend correctly sized clothes to buy. At scale, taking measurements from multiple Echo Look owners, Amazon would start tobuild its own dataset for size and fit to use to further feed its clothes manufacturing efforts byenhancing and better customizing garment fit for its own fashion labels. Even ultimately to offer garments that are customtailored to individual Amazon users, on demand but at fast fashion prices.
Adeyoolas prediction is an entire disintermediation of the retail manufacturing supply chain. A natural end state for me is that somebody like an Amazon can put manufacturing right next to its distribution hubs all of its distribution hubs are optimized for urban centers, you can put manufacturing in those urban hubs, he tells TechCrunch. So if you get enough consumer data then you just create the marketplace for design and you basically make everything just in time, made to order. So you get rid of the inventory problem, you get the stuff made right by the distribution centers to go straight out. And if you had body size and shape data thats what were aiming to produce and deliver at scale you could then basically shrink that time, you can also move towards an end state of made to measure, and you can deliver within a Prime window.
If you get enough consumer data then you just create the marketplace for design and you basically make everything just in time, made to order.
Tailoredfashion at scale is not all thats potentially unlocked by the Echo Looks depth and trend sensing eye. Another technology that could be delivered via this connected camera plus app set-up isvirtualtry ons, with the productbecominga trusted conduitfor Amazon to ask for and receive full length body size measurements, captured from users hands free Echo Lookselfies. With that data it could build anaccurate 3D body model for each shopper, and combined with an inventory of digitized garments the Echo Look app then becomesa virtual changing room where users couldplay around trying garmentsondigitally before theybuy.
Virtual try on could be animportant piece for Amazons fashion ambitions becausebuying clothes isntalways just aboutabout fit especially if youre contemplating buyinghigher priced, more experimental fashionvs wardrobe staples thatpeople canbe comfortable buying without trying. Technology that enablesconsumersto judge whether a just encountered fashion style suits without having to physically pull it over your headis what virtual fitting room startups such asMetail have been working on for years;aiming to remove alast key differentiator for Internet shopping vsbricks and mortar clothes stores. It may not yet be mainstream but the promise is clear.
And with theEcho Look, Amazon mayhave created the perfect arenato slot in this lastpiece to crown its fashion ambitions. Then,with a savvy AI to recommend styles, a virtual body doubleto envisagehow potential purchases look, and local manufacturing that supports very fast shipping the ecommerce giantisin a position toconvince userstheres no practical need to ever visit an actual clothes store.
People are time sensitive, and weve learnt and been programmed now, through the likes of Uber etc, that getting something quickly is possible, adds Adeyoola. With Amazon Prime Now you can order something and it be there within an hour. So then why do I need to go on a busy Tube train, travel for an hour to a high street and get hot and bothered?
Back in the day going to the shopping mall used to be a leisure activity and fun. Its just not that anymore. There are other ways to have fun.
So when does he think Amazon could be ina position to deployvirtual fitting roomtechnology? Adeyoola reckons itcould bring somethingto market intwo years should the companydecide it needs to push into the 3D creation space. For now, he reckonsits not clear they are convinced they need ityet. But Amazon iscertainly paving the way to acquire data that could powerit.(On that front italso boughtanother 3Dstartup focused on fit for shoes, Shoefitr, back in 2015.)
The approach that theyre taking with that selfie Look is a low risk one which is basically to see whether people will buy the product and use it. And the way that the product is coming out is one which is a computer vision way of learning style, so they want people to take pictures of themselves in garments, and then theyll try and use computer vision well, theyll going to use real stylists to start with to rate stuff and then off the back of that work out whether they can basically build an algorithm which can say this is good, this is bad, and then start to use that as a recommendation flow longer term. Which is big, smart value.
They havent thought about going into the 3D creation space thus far. And I think thats because they say, well weve got datasets and well use our datasets to improve as a starting point. So I havent seen evidence of them wanting to make that jump. And I think theyre probably thinking theyre best place to buy it when they feel its tipped over into being a need, rather than still in R&D phase. So, for a startuplike us, having been invited to speak at their European partner conference I think it was a means for them to test where were at and see at what point they might need to either consume or crush.
At the end of the day, if Amazon can deliver on abig data vision of custom tailoredgarmentsin fashionstyles it already knows customers want and shiporders to buyers within a matter of minutes why then, the bedroom in yourown homeeffectively isthe changing room.