Will Lands' End sink or swim on Amazon?
Struggling Lands’ End has agreed to sell select apparel via Amazon. Eight retail experts share their perspectives on the potential risks and rewards.
Lands’ End is on shaky ground.
Roughly two years after spinning off from Sears and 18 months after Dolce & Gabbana executive Federica Marchionni took over as CEO, the outdoor apparel retailer is still struggling to update its staid image, boost its e-commerce sales and capture a younger, more fashionable demographic.
Marchionni is now expanding Lands’ End’s horizons, both offline and on. Earlier this month, the company opened a two-floor pop-up shop in New York City’s trendy SoHo neighborhood, spotlighting apparel, footwear and accessories from its fall, holiday and winter collections along with a range of personalization services and experiences.
Lands’ End is also setting up shop in a far more surprising location: Amazon. The company has agreed to offer Amazon customers a limited number of items from its sports, footwear and Canvas collections after receiving assurances that the e-commerce goliath will adhere to Lands’ End's pricing stipulations. Marchionni told analysts that Lands’ End is “pleased to be partnering with Amazon” and that selling its merchandise on the site presents “an additional channel for us to introduce consumers to our new brand and expanded category.”
It’s a proposition with both possibility and peril. On the one hand, Amazon offers merchants like Lands’ End an unparalleled opportunity to reach shoppers across the globe; on the other hand, Amazon threatens to wipe companies like Lands’ End from existence. John Blackledge, an analyst at investment bank Cowen & Co., projects that Amazon will leapfrog Macy’s to become the leading U.S. apparel retailer by 2017.
Gap Inc. CEO Art Peck said in May that it would be "delusional" for his brand not to consider selling on Amazon. But former Forrester Research retail analyst Sucharita Mulpuru rebutted the strategy in an email to Retail Dive, explaining that Amazon’s data mining activities and penchant for offering similar products at cheaper and/or better prices could doom apparel brands that sell there.
In the wake of the news that Lands’ End will begin selling on Amazon, discussion forum RetailWire asked its BrainTrust panel of retail experts the following questions:
- Do you approve or disapprove with Lands’ End decision to sell a selection of its clothing on Amazon.com?
- What do you see as the pros and cons of the deal?
Here are eight of the most provocative and insightful comments from that discussion. Comments have been edited by Retail Dive for content and length.
1. Consider the alternative
Phil Rubin, CEO, rDialogue: I 100% approve of Lands’ End selling an edit of its line on Amazon.com. It’s a much more compelling alternative than to not selling it on their own site. There are not that many soft goods brands in the “popular” price range that will be able to survive without a relationship like Amazon. Amazon is too good at delivering a customer experience that no soft goods retailers has yet been able to match.
One alternative would have been to follow J. Crew’s lead and partner with a department store or other mass merchant. Oh wait — they already did that, right? Gap and Lands’ End are the first of many to realize the path to long-term survival needs to include Amazon.
2. Winners and losers
Cathy Hotka, Principal, Cathy Hotka & Associates: The way to a complete Amazon victory is for every retailer to capitulate and surrender their sales channel to Amazon’s. Here’s another, and unfortunate, example. Who’s next?
3. Amazon is a channel
Ross Ely, President and CEO, ProLogic Retail Services: Lands’ End is wise to test the waters with Amazon by offering only a limited set of its products for the initial period. While Amazon offers a new channel and new customers, Lands’ End will not control the pricing, placement or promotion of its products. In parallel with this Amazon experiment, Lands’ End should boost investment in its own website and ensure it is the go-to destination for its most loyal shoppers. The incremental business from Amazon will be nice, but Lands’ End does not want Amazon to become its primary sales channel.
4. Amazon is a competitor
Ken Lonyai, Digital Innovation Strategist and co-founder, ScreenPlay InterActive: I think eventually this will backfire for Lands’ End. Target and Toys “R” Us have been down this path (in different ways) before and it didn’t go as they expected. Amazon is on its own trajectory and I can’t believe that they see any benefit from dragging along an average brand. Amazon will do what benefits Amazon, including making decisions that effectively torpedo this association if and when there’s more in it for them than maintaining a Lands’ End “partnership” of sorts. If anything, Amazon will use this association as a yardstick to see what its customers are interested in from the Canvas collection and then bring in their own competitive products. They do it with small marketplace sellers all the time.
5. Sources of strength
Matt Schmitt, President, Chief Strategy & Innovation Officer, Reflect: Lands’ End is likely to realize some benefit in leveraging Amazon. The brand could benefit from two areas of Amazon’s strength — audience and efficient operations/logistics. Now, if Lands’ End can focus strategically, they may be able to get some traction by enhancing the brand perception and finding a lifestyle story to connect with consumers. If they focus on product and brand, then leveraging key partner channels for reach and efficiencies may be a viable path.
6. Rebuilding a brand
Peter Charness, SVP America, Global CMO TXT Group: I think Lands’ End is at a brand-building stage as part of its post-Sears era. On that basis they do need to get in front of customers who haven’t experienced their product in a while. Given that this becomes a positive experience, it may be logical that they “in-source” all their sales thereafter and leave Amazon behind.
7. Don't believe the hype
Doug Garnett, Founder and CEO, Atomic Direct: The potential added profit for Lands’ End from an aggressive Amazon partnership is minimal. Amazon has incredible hype about their sales but that hype doesn’t translate into high levels for a brand that is already familiar with the volumes it can deliver through retail stores. Further, if Lands’ End is hoping this adds some awareness for their products, they’ve misled themselves here. Certainly every brand needs to come to grips with a strategy for leveraging or engaging with Amazon (and taking products OFF Amazon is an entirely valid strategy). But today too many brands believe what Amazon puts out in their press releases without validating whether the reality justifies the hype.
8. If you can't beat 'em, join 'em
Dr. Stephen Needel, Managing Partner, Advanced Simulations: Could any retail clothing chain have become less relevant and interesting over time? Except maybe the old Banana Republic (ah, for the good old days). They need to sell whatever they can sell, wherever they can sell it.
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