Few people understand the retail apocalypse as well as 36-year-old Joyce Azria.
Over the course of her life, she’s witnessed the complete life cycle of a fashion label. Thirty years ago, her father, Max Azria, launched the iconic mall brand BCBG, which made the hottest red carpet looks available to everyday women for under $500. It was a roaring success throughout the ’90s and early 2000s. It was the go-to brand for girls looking for a gown for prom or a college dance.
But like many other large apparel companies of its time, it hasn’t fared well in the digital world. Brands like Everlane and Reformation are rewriting the rules of retail, dropping new products every week rather than every season, and allowing consumers to move seamlessly between shopping in-store and online. And now Amazon looms large on the horizon, eager to bring fashion labels onto its gargantuan platform. All of this disruption in the industry has affected BCBG badly. Last year, after seasons of declining sales, the company filed for bankruptcy protection, shuttering 120 stores, before being acquired by Marquee Brands.
Joyce Azria has observed all of this turbulence closely and has theories about what is going on. “Companies like (BCBG) are like very, very big cruise ships,” she says. “It’s not easy for a company like that to take an enormous turn. It takes a lot more effort, energy, and time to reset the thinking. It’s much easier to just start something new, and be on jet skis.”
That’s exactly what she’s been doing. Over the last decade and a half, the younger Azria has been trying her hand at a range of experimental new fashion brands. In 2009, she took the reins of BCBGeneration, a millennial spin on the BCBG brand with lower price points and a stream of new products hitting the market on a regular basis. Then, last year, she launched Avec Les Filles, a line of classic fashion pieces–pleated skirts, blazers, sundresses–with a dash of French flair and a price point of under $100 for most items. Products were sold both on the brand’s website, and at 155 Macy’s stores. Avec Les Filles shoes are also sold at Nordstrom, Bloomingdales, Lord and Taylor, Revolve, and more. “The brand is about paring down and finding essential wardrobe builders that will carry you from season to season,” she says. “They live as a real pillar in your closet and don’t feel old even though you take them out every summer and fall.”
Azria will continue to run Avec Les Filles, but she is also launching a new brand today called Rohb (a play on the word “robe,” which Azria considers a closet staple). It is different from the others because it is being sold primarily on Amazon, although the brand will also have its own e-commerce operation on its own website. The garments within this collection are neutral basics, like maxi dresses, leggings, and pencil skirts. They are all at a price point of under $50. In the fall, it will unveil its children’s line, Lil Rohb.
It’s all part of Azria’s effort to see how a fashion brand can thrive on Amazon. “With Amazon, we’re maybe running a little ahead of others in the fashion industry, but at the same time, we believe the consumer is already there,” she says. “So we are running different companies that have different distribution strategies.”
So far, Amazon hasn’t had a great relationship with the fashion industry. Given the online retail behemoth’s reach, fashion brands have no choice but to consider selling their products on the platform. It’s not an ideal situation because Amazon isn’t particularly elegant, and it often takes away from a brand’s effort to create a beautiful digital experience for customers. But if a brand chooses to get on board with Amazon, they have two options: Either they join as a third-party seller on the marketplace, or they sell through the wholesale model.
But last year, Digiday discovered that many fashion executives feel Amazon manipulates them to join as a wholesaler by giving wholesale products a higher ranking in searches. But the big problem with the wholesale model is that it allows Amazon to dictate pricing. Amazon constantly alters prices on the site based on sophisticated algorithms about consumer demand. It’s hard to fully understand how the system works, but it seems to work like this: If customers are more likely to buy a brand’s black T-shirt than its pink T-shirt, Amazon might automatically reduce the price of the less popular one to spur sales.
And as one fashion industry insider pointed out in that story, Amazon is primarily interested in maintaining its own margins and pushing out as much volume as possible. For many fashion labels, particularly at the premium or luxury end of the market that have invested a great deal in creating a brand experience and developing a pricing strategy, this can be disastrous.
Azria is well aware of this. Which is why, for her, Amazon is just one piece in a more multifaceted game plan. “I came from the brand perspective and, as an industry, we’ve always looked at Amazon as an afterthought,” she says. “But a lot of businesses were born on Amazon. I think that when you really look at Amazon as one of your forefront strategies and take the time to understand the consumer experience, you begin to see what an amazing landscape this can be.”
Evolve Or Die
To help think about how Rohb will unfold, Azria has brought on Jacob Brenenson, who has experience with launching brands on Amazon, as the brand’s head of business development. While consumers see Amazon as a single entity, Brenenson points out that the platform has had different relationships with different industries. It began as a marketplace for books, and then 10 years ago, it became the go-to place for electronics.
There was a time when Amazon was wooing electronics manufacturers onto the site and over time, the marketplace became the go-to spot for buying small electronic products. Of course, this was also hugely disruptive for both industries, with publishers and electronics manufacturers having to rethink their entire business strategies, and many companies failing altogether. But while there were losers, Brenenson says there were some winners, too. “I think that if companies don’t adjust to the changes in the market, they will eventually close down,” he says. “Only the ones willing to adjust have a chance.”
But adjusting sometimes means coming up with creative workarounds to the problems Amazon presents. For one thing, Amazon doesn’t tend to do well in the high-end designer category, but it does fine with basics and essentials, like plain T-shirts and simple jersey dresses. And Amazon’s wholesale pricing strategy is something that Brenenson acknowledges could negatively affect a fashion brand.
But rather than using this obstacle as an excuse not to do business with Amazon, he and Azria decided that a smarter strategy would be to create a different brand, Robb, that focuses on fashion essentials, rather than bringing on an existing brand with a more complex aesthetic, like Avec Les Filles. “It’s very challenging for a company that has existing brands in retail and other platforms to go onto Amazon because the pricing strategy will confuse the consumer,” he says. “But when you have a brand like Rohb, where the main customer is Amazon, it’s almost like having a totally different business.”
Future Proofing Fashion
For Azria, Rohb has the potential to help it win over consumers now, but it is also a way to better understand how Amazon’s fashion business is going to evolve. While it makes sense that consumers are currently willing to purchase inexpensive basic apparel on Amazon, it’s possible that in the future they will be comfortable enough to buy bigger ticket items on the platform. She points out that while Amazon customers may have started out buying just phone cords and keyboards on the platform, over time, they’ve become much more comfortable with purchasing big-ticket items like flat-screen TVs.
And there’s also the issue of Amazon’s lackluster interface. Azria and Brenenson agree that it’s hard to create an immersive brand on the site right now. There’s no way to get around the fact that people will very likely be searching for Rohb T-shirts while buying tampons or USB cords. But just because the platform is rudimentary right now doesn’t mean that it will always be that way. Amazon certainly has the resources to invest in creating a better user experience, so it seems like only a matter of time before it unveils a more attractive, customizable website for fashion brands.
For Azria and Brenenson, Amazon is a long-term play because the platform is constantly in flux. Berenson points out that 18 years ago, when Amazon was still a tiny startup, Jeff Bezos was hauling products sold on the site to the UPS store to send to customers. Today, the company has the most advanced warehousing and logistics operation in the world. “The point is, what you see today is not what you see tomorrow,” Brenenson says. “The regular corporate mentality is that it’s going to take years to make any big change, but on Amazon we’re seeing changes every single day.”