As new vendors contract with Amazon, the e-commerce giant looks to be experimenting with the development of an active wear line, Bloomberg reports, citing unnamed sources and a note from SinoPac Securities analyst Silvia Chiu.
Among the vendors working with Amazon is Eclat Textile, a Taiwanese vendor for the likes of Nike, Lululemon Athletica and Under Armour, according to the report.
Makalot Industrial, another apparel manufacturer based in Taiwan, which makes garments for Gap Inc., Uniqlo and Kohl’s, is also said to be providing small batches of athletic wear for Amazon, according to Bloomberg’s report. An Amazon spokesperson declined to comment to Retail Dive on the report, saying in an email, "We have a longstanding practice of not commenting on rumor and speculation."
Amazon's interest in athletic wear seems fitting; the e-commerce giant not only sells plenty of athletic basics and shoes already, but is also developing other lines of private-label apparel, including casual wear, office wear, basics and shoes. Athleisure continues to be a healthy market, and Gap, for one, is investing in its athletic brand as part of its recently announced growth strategy.
The move is just Amazon's latest effort to complicate business for apparel makers and retailers. Starting last year, the e-commerce giant has launched a series of private label clothing and accessories brands in various sub-categories, most recently in footwear. The company is also experimenting with various sales and delivery models, including a new apparel subscription service (currently in beta), called Prime Wardrobe.
Amazon's private labels complicate already-difficult choices for brands. Even when a brand doesn't officially distribute through Amazon, hundreds of its SKUs are available through third-party vendors on its Marketplace, according to the report. For example, there are more than 2,300 Amazon Marketplace listings for Tory Burch items, some with discounts as low as 71% off the manufacturer’s suggested retail price.
And while apparel makers can take more control of their brands when they sell directly through Amazon, as Nike decided to do this summer, they run the risk of Amazon evaluating their best sellers and basing its own Essentials items on their performance — a dangerous possibility, considering how well the Amazon Essentials line has done recently.
According to a report from digital insights firm L2, Amazon Essentials accounted for 4% of the company's daily best sellers, up from zero a year ago. Its top-performing item was the "Men’s Cotton Pique Polo Shirt," markedly similar to Dockers’ "Men’s Short Sleeve Solid Poly Pique Polo Shirt" at half the price. "With Levi’s/Dockers owning the second highest share of Best Sellers in the Men’s clothing category, this suggests Amazon’s private label brands pose the greatest threat to the very brands that are top of the category today," notes L2.
On Prime Day, for the first time, Amazon’s private label brands Mae (lingerie), Goodthreads (men’s dress shirts), Lark & Ro (women’s dresses) and Buttoned Down (men’s dress shirts) landed in Amazon’s Best Seller rankings in their categories, driven by full-screen visibility on Prime Day’s fashion landing pages, according to L2. Alarmingly, Amazon’s Fashion landing page on Prime Day exclusively featured private label products, the research found — and those private labels maintained much of their momentum after Prime Day.
"Amazon’s private label brands were the main beneficiaries of Prime Day, suggesting that in the future there will be fewer opportunities for legacy brands to capitalize on busy Amazon shopping days," L2 said in its report.