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Amazon is punching its ticket to athleisure land, Recode reports, even though the price of admission is now sky-high.
The company is looking to hire several new people — “brand managers” — to develop its own activewear lines. Or, in the words of the job postings that hint at the venture, to “build authentic activewear private label brands.”
So: good idea or bad idea?
As we wrote last week, the athleisure bubble is starting to pop. Once-successful brands heralded as threats to Lululemon’s sheer throne, like Yogasmoga, are filing for bankruptcy. “There isn’t any more room for another athleisure company,” according to my colleague Chavie Lieber. But what about an old $247.6 billion company?
Matt Powell, a sports industry analyst at NPD Group, contextualized Amazon’s new venture with two interesting statistics:
Just to frame the Amazon activewear decision: there are over 2000 activewear brands reported by consumers and sales for the year are +12%— Matt Powell (@NPDMattPowell) January 4, 2017
The first makes you wonder how any brand could faceplant in this category: Sales in the past year are up 12 percent. That’s good! The tide of athleisure is still rising, albeit not as quickly as it once was — NDP Group reported 16 percent growth in 2015. Still, this is a $97 billion industry that’s still growing.
The second part of Powell’s tweet is the bad news: There are supposedly more than 2,000 activewear brands. That’s a smog of labels so thick there’s practically no way to cut through it. There’s only so many times a shopper can be told that this brand is the new Lululemon.
Unless, of course, you’re Amazon. It’s hard to beat the fact that 55 percent of online shoppers do not pass go, do not collect $200, and head straight to Amazon when buying something on the web. And it makes sense: You might not remember to type in Yogasmoga’s website name when seeking leggings, but if you’re one of the customers already buying $107 billion worth of other products on Amazon, adding a pair to your cart is as easy as one extra click.
Amazon has experienced real success with some of its private labels — namely its AmazonBasics line, which sells batteries that now account for a third of all battery purchases made online. However the famously tight-lipped company hasn’t shared numbers on its private-label clothing brands, including Scout + Ro, Society New York, and Lark & Ro.
And despite the years-long push to refine Amazon Fashion, the shopping experience is still underwhelming compared to the super-curated retailers customers are used to (which also may be why luxury brands don’t seem eager to work with the massive site).
But what Amazon lacks in exclusivity and cool, it may make up for in sheer scale. Analysts at financial service firm Cowen & Co. still predict Amazon will be the largest clothing retailer in the US in 2017. Convenience is a major asset: Amazon Prime remains the biggest draw for customers, according to Cowen analysts. So is the fact that name brands are actually less important now than they’ve ever been to young shoppers, which could help the likes of a Scout + Ro — or an as-yet-unnamed athleisure brand.
The one name brand everyone does know? Amazon. And that’s half the battle won right there. While there may not be room for new yoga brands to break into this bubble, Amazon may be a massive eighth-largest-retailer-in-the-world-sized exception to the rule.