Amazon, Net-a-Porter and Matches pushing their own private fashion labels online
Major e-tailers are aggressively pushing their private fashion labels, offering everything from everyday basics to high-end garments, including collections that change regularly and aren’t tied to seasons
Today, online menswear retailer Mr Porter launches its first in-house label, Mr. P, a 53-piece collection that the company says will offer 24 essential every day basic items and 29 seasonal items.
The London-based company, which already stocks 400 brands that vary from household names like Gucci to more obscure fare like Aspesi, will aggressively push its in-house label, or private label collections with a full advertising campaign.
Capsule collections will be released in February and April as well as shoes and accessories for autumn-winter 2018.
Mr Porter’s move into private labels is just the latest trend among popular online fashion retailers that are broadening their appeal by pushing brands they control themselves. Mr Porter’s sister site, The Outnet, perhaps provided the blueprint with parent company Yoox Net-A-Porter Group’s critically successful and attractively priced women’s brand Iris&Ink. Bloomberg reported this year that private labels will account for 50 per cent of sales at mass-market company fashion retailer ASOS.
Luxury retailer matchesfashion.com has found success with womenswear and menswear brand Raey, and Amazon, one of the world’s biggest retailers, has been the most proactive, launching several labels including Goodthreads, Franklin&Freeman, Franklin Tailored, James&Erin, Lark&Ro and North Eleven.
So why are online fashion retailers pushing so aggressively into private labels? “Private labels have traditionally been a way for businesses to cut costs and make the most of higher margins,” says Greer Hughes, mindset consultant director for trend forecasting company WGSN, but the recent moves could be seen as an “opportunity to increase brand equity”.
Higher margins will always be attractive to retailers, but in an industry influenced by trends and fuelled by social media, it is an increasingly important factor. The fast and nimble business model has proved wildly successful for companies such H&M and Zara and for online retailers like ASOS and, of course, Amazon.
But higher end online fashion retailers are starting to see the benefits of speed, particularly as luxury fashion steers away from traditional seasonal shopping and towards “see now, buy now” trends.
“We launched Raey in spring 2015 to give our global customers, both women and men, a collection that doesn’t reflect seasonal trends and instead focuses on luxury fabrics, clean silhouettes and minimal palette,” says Rachael Proud, creative director of Raey, matchesfashion.com’s private label. “We feel like we know our customer really well now, and the sales figures back up our instincts, so we try to answer their needs and provide a brilliant product. We like that our customer is loyal and feel we are building up a conversation with them as the seasons go along. The collection rolls through the seasons, via monthly drops, so there isn’t one specific inspiration.”
Opening its first stand-alone store in London this year has also allowed Raey to have a direct link with customers and to showcase what they have on offer.
The growth of private labels among online fashion retailers should alarm traditional brands as they not only have more brands to compete against, but they also lack the inbuilt advantages. Amazon’s private-label apparel sales totalled US$21 million this year according to e-commerce analytics firm One Click Retail.
It’s a tiny fraction of the company’s revenue and a figure that doesn’t compare all too favourably with the billions made by fashions biggest names, but the underlying growth patterns tell a different story.
Sales for the relatively new Lark&Ro doubled from US$5 million to US$10 million in a year and Amazon is giving their brands increased visibility on its site and through its algorithms.
Research from data firm L2 found that during the recent Amazon Prime Day, the company’s huge shopping event, its private labels Mae, Goodthreads, Lark&Ro and Buttoned Down all made the bestseller rankings in their respective categories. They were also given prominent “full-screen visibility” on the company’s Prime Day fashion homepage – essentially millions of dollars worth of exposure for free.
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The private label success stories will encourage other fashion e-commerce players to consider something similar, says Hughes, especially with the growing dominance of online marketplaces such as Amazon, China’s Alibaba, India’s Flipkart and many others. “The rise of marketplaces signals opportunities for more private labels to come into the mix,” Hughes says.