#038: Amazon Style – WTF? Opening a brick-and-mortar clothing retail store?

Amazon Style opening in Los Angles is a bold move from the world’s largest clothing retailer. However, it appears they are taking a page out of Canada Goose’s book.

Dave Young:

Welcome to the Empire Builders Podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector and storyteller. I’m Stephen’s sidekick and business partner, Dave Young. Before we get into today’s episode, a word from our sponsor, which is, well it’s us, but we’re highlighting ads we’ve written and produced for our clients. So here’s one of those.

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Dave Young:

Welcome to another episode of the Empire Builders podcast. You wanted to talk about Amazon today. What is their left to say about Amazon?

Stephen Semple:

Amazon, once again, is doing something that you need to be aware of. But there are a couple of other little interesting sidebars in this Amazon story. So, about a year ago, before we actually started this podcast, I had created a YouTube video and we’ll have a link to this YouTube video talking about some trends that we saw coming into the pandemic. So pre-pandemic, we saw online retailing cross the magic 15% of all retail transactions in December, pre-pandemic. Now, the reason why that’s important is, there’s this whole idea of the diffusion of innovation and how things grow. And basically, the amount of time it takes from something go from zero to 15% is the amount of time it takes to go from 15% to 80%. So that’s kind of when things explode. And we have seen this continued explosion of online retailing.

Stephen Semple:

And that has been a cautionary thing we’ve been sharing with clients, “Look, you’ve just got to be aware of this.” But here’s the interesting thing. One of the areas that lagged, that was not at that mark, was clothing. 15% of all clothing retailing is now done online. 2002, Amazon started selling clothing online and Amazon is now the largest retailer of clothing in North America. They just recently past Walmart. That’s big news and they are a forced to be reckoned with. So, if you’re Amazon and you’re looking at the online clothing business, and you’re wanting to create a better experience, who do you think you’d look out at? We’ve talked about this before. Dave, who is the second fastest-growing luxury brand in the world? We’ve talked about them before.

Check out the Canada Goose Episode here!

Dave Young:

I didn’t know there was going to be a quiz. I would’ve studied. Are we talking about Canada Goose?

Stephen Semple:

We’re talking about Canada Goose, back in episode 12.

Dave Young:

Okay.

Stephen Semple:

So if you are running the clothing area for Amazon, you’d look at them, right?

Dave Young:

Oh yeah, of course.

Stephen Semple:

And if they’d been listening to our podcast, what would they do? They would say, “Look, there’s probably a way to marry online and brick and mortar, right?”

Dave Young:

And maybe find some people that have done it.

Stephen Semple:

And find some people that have done it. And boy, oh boy. The one with a really fast luxury brand, that’s who you’d look at, right? Well, guess what Amazon announced. Amazon announced on Thursday and we’re recording this on January 24th, they announced on Thursday the past week that they are going to be opening a brick and mortar store in California. They’re going to be opening a 30,000 square foot store right next to Nordstrom and Urban Outfitters and J.Crew.

Dave Young:

That’s sizable.

Stephen Semple:

That’s sizeable. And what are they going to be doing? On display is only going to be one size, one outfit, one color, sounds kind of familiar, doesn’t it?

Dave Young:

Stay tuned. We’re going to wrap up this story and tell you how to apply this lesson to your business right after this.

[Empire Builders Ad]

Dave Young:

Let’s pick up our story where we left off and trust me, you haven’t missed a thing.

Dave Young:

Go back and listen to the Canada goose episode.

Stephen Semple:

Yeah.

Dave Young:

That’s exactly what they were doing.

Dave Young:

You know, what I find ironic about is our friends, our good friends, Jeffrey and Bryan Eisenberg wrote a book a number of years ago called Be Like Amazon. And Amazon is going to be like Canada Goose.

Stephen Semple:

Amazon is going to be like Canada Goose. And it’s funny, and I kind of make fun of this whole thing of Amazon copying Canada Goose. But you know they were aware of Canada Goose. There’s no way that they were not aware of Canada Goose. And the more I read about this store, the more I see parallels to Canada Goose. Now, Amazon is adding a bunch of their own technology to it. Like, there’ll be a pad and you pick your thing and you go to the change room and it’ll be there for you to try on and whatnot. But there are also remarkable parallels to Canada Goose. And this speaks to thing that we’ve been continuing talking about this podcast where there are these messages out there, it’d be easy for Amazon to go, “We’re an online retailer, let’s ignore these brick and mortar guys.” But then there’s this innovation happening with a brick-and-mortar retailer. We’ll bring it in, learn from it, put our own spin on it and put it out there. It’s this whole idea of looking around at the world and learning from it. And so this is what Amazon is going to be doing.

Dave Young:

They’re scratching their heads and saying, “It’s come to our attention that there is market share that we have not acquired.”

Stephen Semple:

Absolutely. And they are the largest and they’re planning on getting larger. So if you are a retailer, even if it’s a space that Amazon has not beaten the crap out of, be aware, you’re on their radar. If you are a retailer in the clothing space, best pay attention. Now listen for future podcasts because when this store opens in LA, I will be going out there to visit this store and be able to share with our listeners and share with you and all the folks, what this store is going to be like. And it’s being called Amazon Style. That is the name of the store.

Dave Young:

I’ll go with you.

Stephen Semple:

You’ll go with me? Sounds like a great trip.

Dave Young:

We’ll record a podcast from there, I think.

Stephen Semple:

That’d be very cool, but this is the types of things that we are keeping our eyes on to be able to share with business owners because man, the world is changing and shifting and we just need to be aware of these trends.

Dave Young:

Don’t look to your direct competitors for innovation ideas, look to something that you’re not doing, right? That’s what they’re doing. They’ve been selling clothes, but for innovation, they look to somebody that was doing something different than them. Yes, competing in the same category, but not in the same way. I think it’s fascinating to watch those kinds of things. And I think the lesson to me for a small business owner is, you’re not necessarily going to find your innovation in the direct competitor, across the street. Look for adjacent categories. Look for things that share the same characteristics as your business model and see who’s innovating in areas like that.

Stephen Semple:

Absolutely. It’s like, they didn’t steal this idea from eBay. I would’ve thought it would’ve been a brick-and-mortar retailer that would’ve adapted and run with this idea more than it being Amazon. But you know, Amazon has telegraphed. Amazon is interested in this marrying, that’s another one of the reasons why they bought Whole Foods. There are lots of lessons here. And the other thing is, anybody in retailing, I would suggest you go back and listen to the YouTube video, watch the YouTube video on this tipping point of retail. It’s really interesting and what it tells us is, the trends that we see coming are just going to accelerate. So you best embrace them and move with them.

Dave Young: Thanks for listening to the podcast. Please share us, subscribe on your favorite podcast app and leave us a big fat juicy five star rating and review at Apple Podcasts.

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