← The Glossy Podcast
The Glossy Podcast
Prime Day data, Meta and EssilorLuxottica, New Guards Group news — and fashion brands' Amazon playbook
00:48:52
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- [00:02]
Danny Parisi
Brands care about two things in media. One they love, the other they hate. Growth moves brands forward. Waste holds them back. Tenuity is an agency built for marketers who demand growth and accountability. Their powerful technology hunts down waste, the biggest growth killer of all, enabling their brilliant people to create growth for brands that defines the category. Tenuity. Love growth, Hate waste. Find out what your media is really doing @lovegrowth. Hate waste.com hello and welcome back to the Glossy Podcast. I'm your host, senior fashion reporter Danny Parisi, and I'm here with our editor in chief, Jill Manoff. Hello, Jill.
- [00:53]
Jill Manoff
Good morning. How are you?
- [00:54]
Danny Parisi
I'm good. It's good to be back. We took a break last week, so it's been a little while. We have a very Amazon heavy episode today because it is Prime Day week. Prime Week of Prime Week day. I don't know. Prime Day Week, Amazon Prime Day was, you know, began earlier this week. We're going to talk about some of the data that has come out since. Later in the episode, though, you had a great conversation with Lara Meyer, who is the CEO and founder of Envision Horizons, an Amazon and marketplace agency. She works with brands who sell on Amazon and similar marketplaces about how to build a good business on those marketplaces. I haven't heard it yet, but I've heard you had a great conversation with her about Prime Day and also how fashion brands can build a business on Amazon. We'll talk about some Prime Day data that's more up to date today first. And then later in the episode you have that conversation with Lara. We're also going to talk about. You and I are also going to talk about Meta taking a minority stake in Essilor Luxottica and we can dive into a pretty big upcoming business of AI powered smart glasses, which I feel like is a concept that's been around for a while and never caught on, but now is like maybe it is a little bit. And then lastly, I want to talk about Heron Preston buying his brand back from New Guards Group, which also will lead us into a whole conversation about what the heck is going on with New Guards Group, because they're in sort of a weird situation.
- [02:14]
Jill Manoff
That's the smartest decision he ever made.
- [02:16]
Danny Parisi
I know. Yeah. But let's start with Amazon. Like I said, it's Prime Day week. The data kind of always comes out in sort of weird spurts. So there is some data out that we can analyze. Adobe had a great analysis. Basically it said total online sales in the US which is not specific to Amazon. It's Just all online sales but for the first 24 hours of Prime Day was like $8 billion total in 24 hours, which is up 10% from the last year. Even though there's been a lot of consumer sentiment I think sort of being shaken up by tariffs and other things, it does seem like there was a fairly big boost in online sales right around that time. However, there was also a report from a company called Momentum Commerce which manages sales for dozens of companies on Amazon and they said they had seen their prime day revenue down 41%. But then there's drama because Amazon disputed that and said something like all third party statements about Amazon data, it's highly inaccurate. So there's kind of back and forth on what the actual results are so far. But I mean what do you make of what we've seen so far?
- [03:25]
Jill Manoff
Yeah, that's interesting. On the modern retail side, our sister brand, Allison Smith wrote a story also about day one of Amazon and also checked the figures from this Momentum company and yes, they sent her the same statement. Highly inaccurate. I want to say I feel like we go through this every prime day like Amazon cough up the data fast and then you don't have to have these disputes like give us the actual data. It's wild. But yeah, that definitely a downturn. And he, they and Momentum also had some other other data points that was saying the average household spend went down slightly. So it was at 106. People are spending slightly less per purchase at $20. We'll see where it lands. They've never done a four day Prime Day before. So are people just kind of spacing out their pur. They have four days, why not? When I was talking to Lara, she was talking about, I guess rates can fluctuate. I think that if consumers are in the know, maybe if there's are things that they definitely want, they should probably shop early because we know with tariffs there are inventory concerns on behalf of these brands. So maybe they'll run out or maybe they'll yeah, just pull off of the the deal altogether because they're kind of conserving their inventory. So various things happening here. And of course Amazon has a lot of competition this season, this week with all of the other retailers going hard with their sales. Walmart in particular, I think it's running through this weekend went from four days to six. There's also a great TikTok shop sale and Target. So. And they're not just like extending their sales, they're like sweetening the deal with all of these other little perks which Is nice.
- [05:18]
Danny Parisi
Yeah. There's. There's always counter programming from the other big retailers. And like you said, Walmart feels like the biggest direct competitor with Amazon. You. So you alluded to something that I also saw. I don't know where you saw this data, but I saw it from a company called Numerator that said two thirds of their Prime Day purchases that they saw this year cost less than $20.
- [05:38]
Jill Manoff
That one was Numerator. I saw the same data.
- [05:40]
Danny Parisi
Yes. Okay. Yeah, Yeah, I thought that was super interesting because it does track with kind of what we were talking about with consumer sentiment. People being, you know, freaked out by tariffs and spending less and everything. And, you know, but they'll still buy, like, a little cheap treat for themselves or something like that. So I feel like I could see one. Like, I could see both things happening where, like, people are rattled by tariffs and so they're spending less on Prime Day and then the numbers go down or people are rattled by tariffs, so they haven't been spending before Prime Day and are saving it all up for Prime Day. So I guess we'll have to see once more official data comes directly from Amazon. But it does seem like overall, you know, the numbers are down a little bit.
- [06:20]
Jill Manoff
Yeah. And it's interesting to see how people shop. Like, Numerator announced that some of the best sellers were, like, everyday items like dish soap and protein shakes. And when I told a family member last night, are you shopping Prime Day? Of course, work on the brain. But the way that they, like, decided to look at it was to pull up, like, buy again, like, their past purchases and see, you know, what they typically buy from Amazon and if it's on sale. And there were a lot of things that said 39% off, up to something said 51% off. So they were kind of like, ooh, I should buy this now. So I think that makes good sense.
- [06:54]
Danny Parisi
Last thing I want to talk about on Amazon. And again, you have a whole conversation later in the episode that goes even deeper on this stuff. But one other thing was, before Prime Day, you and I were speculating, will Amazon luxury stores be part of the extravaganza? Would they have deals on luxury stores? And I checked, and they do. They did have a big banner for Prime Day on the luxury store's homepage. I did notice that it was almost entirely focused on pre loved, which is their term for, you know, what goes around comes around rebag. Like, they were really highlighting all of the secondhand dealers that are on luxury stores as part of the Prime Day. But There were a few brands, Laroude, who is, you know, they've been on Glossy, the podcast, they've been in our events. Great brand, but they had some discounts and then a lot of beauty, I noticed.
- [07:43]
Jill Manoff
Interesting.
- [07:43]
Danny Parisi
But a handful of fashion brands. So I do still get the sense that maybe some of the luxury brands there may not have wanted to fully go deep on this rush of super steep discounts. Because we always talk about that's not super luxury. But there were some. They were up to like 20%, I think, think discounts on luxury stores.
- [08:04]
Jill Manoff
Interesting. Yeah. Speaking with Laura, as she, she was like, the luxury customer is on Amazon. So I don't know, like, question mark, whether that's a good strategy, you know, compared to the other retailers that are taking part in sales this week. Modern retail has kind of has mentioned, like, not everyone's a prime member, so there is a barrier to entry. You do need to be a member to shop these sales. So I think other retailers could benefit. But yeah, and I think where we land this week in terms of sales for the week, whether across retailers or Amazon, it will say a lot about where we are in terms of consumer sentiment. We know there's a lot of fear about tariffs impacting strategy and inventory and all the things. So we'll see.
- [08:47]
Danny Parisi
Let's talk about Meta and Esslore Luxottica. So announced this week, or I should say reported by Bloomberg this week. I don't think, as of Thursday morning, I don't think there's an official announcement from either company, but Meta reportedly bought a minority stake in Esselor Luxottica. Probably most of our listeners know this company, but they're a huge eyewear manufacturer. They make glasses for Gucci and Ray Ban and Oakley and Dolce and Gabbana. They make glasses for basically anybody, anybody and Everybody. Meta spent $3.5 billion taking an investment into Esseleur Luxottica as an extension of this partnership they have with Ray Ban, which is one of Essler Luxottica's brands, to make these smart glasses, which I'm sure you've seen because they've been around, I think, since 2021 at this point. And the second iteration, which came out in 2023, became a surprising hit. They've sold 2 million pairs of these glasses. And it's really surprising to me. Do you remember Google Glass?
- [09:48]
Jill Manoff
Yeah.
- [09:49]
Danny Parisi
From years ago, which was from 2012, I believe it fell flat on its face. Nobody was like, this is stupid. I don't want to wear a clunky, ugly computer on My face and Google kind of like, you know, withdrew from it. And then the meta Ray Ban thing came out and it feels like a bunch of people were into it. So I don't know what changed. I mean, one thing is that they look like normal glasses. Like it hides the fact that it's like a smart device. Whereas the Google Glass thing, you kind of looked like you were in like a 1980s science fiction movie. Anyway, I'll pause there. I mean, what do you make of this situation with Meta?
- [10:24]
Jill Manoff
Maybe Google Glass is ahead of its time. I feel like the technology and just regular consumers familiarity with the such technology. I just feel like, yeah, it was, it was too soon. But yeah, Wild. I forget how large Essler exotica is. That 3.5 billion only bought 3% of this company. Very, very minority stake. But isn't that wild? But interesting that, you know, Metta also said it may up its stake to 5%. It definitely sees a lot of potential in this area. There was a report that Metta is also betting on the idea that people will one day work and play wearing headsets or glasses. I mean, looking at the technology, I've never really done a double take where I've gone, wow, that's brilliant. But I think that there are some ads floating around where promoting the Ray Ban version and it has somebody speaking in a different language and how you, it translates it for you in terms of like, basically like speaking it in English in your ear. I mean that's very. It's the future. It's really cool. So, and there are obviously other, there's other functionality in terms of messaging and image taking, images and video and a lot of other things. But I do see a lot of potential here. It's wild that we could someday all be walking around with these glasses. But I don't want to poo poo it. I think there's potential.
- [11:53]
Danny Parisi
I do too. And I think I, I say this a lot, but there's a lot of tech products that come out that I feel like pushed from the top down a little bit, you know, and it's like, does anybody actually want this thing? Like speaking of Meta, like the whole Metaverse, like everyone in the future, everyone's going to do their meetings in Horizon, whatever. I was like, it just felt like that's not true. Nobody's going to do that glasses though, the smart glasses. Like we already said, they've already sold 2 million pairs. It feels like something people genuinely were interested in. And so I think Meta jumping on one of their first products that people Actually, there's an organic interest in. Does feel smart to me, and I think taking a minority stake in the company that makes them, I think seems like a smart business move altogether. So, yeah, I'm with you. I feel like this is one of the kind of few newer sort of tech things that I feel like there's genuine, there's immediate use cases you can imagine, like you're talking about live direct translation or things like that that feel obvious and don't need to be kind of forced on people. And again, already proven they've sold millions of pairs. So altogether it feels like not a lost cause the way some Silicon Valley pursuits do.
- [13:09]
Jill Manoff
Yes. And it also reflects Meta's ongoing investment in AI. Obviously they're going in that direction. It was also interesting to see we talked to an executive from Warby Parker at our recent event, and they obviously have a partnership with Google as well. Apparently, after this news came out about this investment, Warby Parker shares also saw a jump. Just. It definitely said a lot about everyone's belief in this space. So, yeah, watch it. I'm excited.
- [13:41]
Danny Parisi
And last thing is, I do think that we'll probably see it expand out to, like we said, S Laurel Exotica makes glasses for Gucci and Armani and all these big fashion brands, some of which I think my impression is that they're a little hands off. It's like S. Laurel Exotica just uses our name and makes whatever. But if they have the knowledge and expertise to make the glasses, which they're already doing at Ray Ban, I feel like it would not be that hard to just do the same thing. But it's a pair of Gucci glasses instead of Ray Bans or something with the same guts inside it. So I definitely see them probably expanding. It'll just depend if the brands want that, I guess. Does Gucci want to have smart glasses? I could see them.
- [14:24]
Jill Manoff
I could see Gucci. Yeah. I think. Depends on the brand, right?
- [14:28]
Danny Parisi
Yeah. Cool. Let's talk about our last topic. I mentioned this at the beginning, but Heron Preston, acclaimed streetwear designer, he's had his eponymous brand since 2016. Bought it back from New Guards Group, which is an Italian luxury kind of holding company that sort of specializes in streetwear. You know, they own off white. They own Opening Ceremony. Do they still own Opening Ceremony? I should check.
- [14:56]
Jill Manoff
It's all very peculiar. If you ever. If you. I'm like, what the hell? So New Guards Group filed Chapter 11 bankruptcy in November 2024. So I poked around a little bit before we got on the pod. If you go on their website, they've got their list of brands which was at one time ten international luxury brands. If you click on each one, everyone that they still own goes to an error page. Lovely. So Opening Ceremony, they've got one called Unravel Project, they've got one called Kimmy Kirum, Peggy Goo.
- [15:29]
Lara Meyer
So yes.
- [15:30]
Jill Manoff
And. And meanwhile the other ones that they have sold off. Oh, and also Opening Ceremony, it hasn't posted on Instagram since 2023. There's another one on their site, no Instagram since 2024 called. I'm probably butchering it. Marcelo Berlon, county of Milan. Anyway, so it seems like a cluster F at that company and like we talked about, they're selling off these brands one by one. The New Guards Group sold off off white in late 2024 to Blue Star Alliance. Also sold off Palm Angels in February 2025 also to Blue Star alliance, which is almost. It's not like where brands go to die, it's like where like has been. Brands are getting scooped up. Like limited to Justice, Scotch and Soda. It's a, it's not really a. Blue Star alliance is not best known for, I guess like that streetwear luxury crossover that these brands are known for. And I haven't heard much out of these brands since. So anyway, what's your thoughts? I'm talking a lot.
- [16:29]
Danny Parisi
No, no, you're. I mean you. I think you nailed it. Like, New Guards had a stable of, I would say like kind of specialized in the streetwear luxury crossover. They were. One thing we haven't talked about yet is they were bought by Farfetch'd. New guards was in 2019 for $675 million, which I wonder if that contributed to Farfetch'd current situation. The fact that they were throwing around hundreds of millions of dollars on like maybe ill advised purchases. Farfetch'd was then bought by Coupang in 2024. They filed for bankruptcy last year. New Guards did. And yeah, like you said, they have sold off a lot of their brands. But interestingly they've sold a lot of them to the original founder. Aaron Preston bought the rights to his brand back. So did the founders of Ambush. So did the founders of Palm Angels.
- [17:21]
Jill Manoff
Another brand called Alanui or something like that. Another one too.
- [17:24]
Danny Parisi
Alanui. Yes, that one too. New Guards has also lost some of their licensing deals. They had a deal with Reebok, but Authentic Brands Group terminated that in the end of 2024, around the time they were filing for bankruptcy, which makes sense. But yeah, so they're kind of like, I'm sure they must be doing a lot of math over there and trying to offload the things that are weighing the business down. But I do think it's cool. And I wouldn't say it's out of generosity or anything, but it's cool that it's the original founders in a lot of cases getting their brands back. Hopefully they can do something cool with it. But it would be easy for new guards to sell it off to, I don't know, some random strip it for parts and sell it to some obscure company. Maybe there's a contractual reason they're not doing that. But I do think it's nice that in a lot of cases it seems like the original brand founders are getting their brands back.
- [18:14]
Jill Manoff
I agree. And you almost like question mark, what are they going to do? Because the way here on Preston's his statement, it's very like, I'm free and to do what I want. Like one of the quotes was like, I'm walking away from a very difficult business relationship, looking forward to designing with more freedom. So I, I mean, I'm excited, talented, it'll be great. And also, he cut his ties with H and M. Apparently he was creative director or creative menswear advisor. Yes. And so did a couple of collections last year. So it's kind of like a whole relaunch and I think that we're expecting it late this year.
- [18:56]
Danny Parisi
I think so. Yeah. I got the same sense from his statements that it was a little bit making it clear that it was not the best dynamic over there. I want to say one quick thing is I think that new guards over invested on streetwear. There was the streetwear boom, which it's not gone or anything. Streetwear and luxury are still very entwined, but I think they way over indexed on it and just didn't know how to. And then out of their control. But Virgil Abloh died, which was very disruptive to the business. And I don't think it really translates. I don't think there was like a good transition to the next stage of off white. So I don't know, it seemed like there was a lot of factors that led to their. Their current situation.
- [19:40]
Jill Manoff
Such a good point. Because my gosh, stories are even rolling out this morning. Like, is prep the next streetwear? It's always like, what's the next streetwear? Which just insinuates streetwear is over.
- [19:51]
Danny Parisi
Is streetwear is not the current streetwear. Yeah, exactly. I think that's all the time we have for our week in review segment. But as we've mentioned, you have this great conversation with Lara Meyer coming up after a short break. Any other little tease you can give our listeners before we cut to.
- [20:07]
Jill Manoff
Oh, she really just stressed the idea that selling on Amazon as a fashion brand considering the margins ain't easy. So yeah, she goes deep into that, which is great.
- [20:19]
Danny Parisi
Well, thank you for listening to our news segment. We're gonna take a short break and we'll be right back with Joe's conversation with Lara. You already know how beauty lovers treat their favorite products. They cut open the tube, scrape the last bit of blush and make every drop count. So why waste your media? Tunuity helps beauty brands eliminate waste and scale what works. Media and measurement live under one roof so you can see what's working, what's wasting. Budget and where to go next. Love growth, Hate waste. Waste is the biggest growth killer of all. It hides in bloated budgets, broken attribution and vague assumptions. Tinuity doesn't tolerate it. Instead they track it down, expose it and eliminate it. Because every wasted dollar is growth that never had a chance. Don't let your media go to waste. Visit lovegrowth hate waste.com foreign.
- [21:24]
Jill Manoff
Hey Lara, thanks for being here.
- [21:27]
Lara Meyer
It's my pleasure. So wonderful to see you again, Jill.
- [21:30]
Jill Manoff
You too. So we are recording during the first ever four day Amazon Prime Day. So I thought it would be a great time to check in on fashion's relationship with the marketplace because we know this is an ongoing, I don't know, saga. So yeah, like today I. Is it a bad look? Is it good for business in general, like high level? Where would you take that question?
- [21:53]
Lara Meyer
Prime Day yesterday was a really interesting one. There were a lot of pessimistic headlines at the beginning of the day. There was a Bloomberg article calling out that it was 14% slower than last year. There was an Oracle report that was just published, I think today that Prime Day sales were going to be down 40%. I have not had that experience and it's always very interesting because I think negative headlines sometimes are what captures people's attention and what's. What we're seeing is that, well number one, our clients still saw if we remove the outliers at least a 4x in average daily sales compared to June yesterday. And some of our client like if you include our outliers because we do have some clients that just absolutely killed it, then that brings up our total average up to over. It was a 7.2x daily average. So from our perspective things are sitting quite well. But it is going to be interesting to see how it paces out across the four days. Because one hypothesis is that the first two days are really going to be the biggest because consumer habits are used to to the two day event or things start to slow down today and tomorrow. And then you have the procrastination shoppers like myself who are finally like oh yeah, I have to go take advantage of these purchases. But what I thought was really interesting this year. So Amazon did a four day event but Walmart snuck in there with a six day event where they actually go through the weekend. So if you do forget those prime day deal purchases in the next four days it'll be interesting if people then say oh wait, but I can still shop it on Walmart.
- [23:50]
Jill Manoff
Really smart Walmart. For the your clients that are really like going gangbusters. Does the do the sales the correspond with the deep how deep the discount is? Like the deeper the discount the more sales you're seeing?
- [24:05]
Lara Meyer
Yes. So a big change this year versus last year and even the year prior is we found if we look at from basically 21 to 25, the best practice was to have at least your top sellers at 30% off. And if you're really trying to be aggressive like go for the top, you know, 20% of your catalog or even your entire catalog because Amazon used to have a filter where you could filter the 30% off deals or more. Well this year that changed. Not only is it four days and you're throwing us through a 96 hour chaos, but now that's been up to 40% and so there wasn't even that filter this year, but it's more so deals that have that are 40% offer more have special badging and special landing pages. So the strategy is shifting from okay, well you should have at least 30% off to you should really have this flagship product that you do at least 40 or more. Our clients who really were gangbusters Yesterday they had 50% off one of their top sellers and then everything else was a more conservative promotion and then you have that halo effect and they also did that 50% off for a lot of them don't do 50% off for the full four days but just specific time windows.
- [25:38]
Jill Manoff
Oh, interesting. So I was going to ask so did you find out how it was going to be like you were able to categorize like that 40% up and above on day one of Prime Day and did some of your brands adjust at that point?
- [25:51]
Lara Meyer
So there were rumors about the 40% off special batching. I want to say like two months ago, like that had hit the rumor mill circuit. I don't even know if there was a official public announcement of it. But the removal of the 30% off or more filter was something that we had to just learn as, as things go live in the website updates. And so we did advise clients who again wanted to be aggressive and you know, their margins aren't being totally eat up by the tariff situation and whatnot because you know there's a lot of macro trends at play here.
- [26:28]
Jill Manoff
Yeah.
- [26:29]
Lara Meyer
And for them to test maybe having that 40% off on at least one key. Asin.
- [26:35]
Jill Manoff
Got it. So there's very little manipulation of the pricing after day one. I was going to say are people smart to wait till day four? Because maybe people. It's like an estate sale and the discounts go deeper. Yeah.
- [26:47]
Lara Meyer
There are, there are programs so Amazon lightning deals, those are timed events. So there are new deals or refresh deals that do roll out over the course of the four days. So we have some clients where we've stacked it where they have some bigger deals coming on the last day as like our final push. And while the data is slow to load and it's hard to have the whole picture during these key events, we are making game time decisions as we are seeing as the data comes through, like what we need to do because we do set goals and forecast by day for our clients. So if we're under pacing then the strategy needs to be adjusted.
- [27:33]
Jill Manoff
So. Interesting. So I know you work with a variety of clients, not just fashion brands, but would you say in terms of fashion and not just apparel but people may be contemporary or that price point point or above, like what is their take? Because there are various attitudes about whether or not we discount, whether or not we sell on Amazon in general. But let's just start with like fashion and any sort of interplay with did, did they play in Prime Day this year?
- [28:02]
Lara Meyer
Mm. So Prime Day is a very interesting one for fashion because one of the hardest things to for the fashion category in general on Amazon is discoverability. One of the reasons why higher end fashion brands or even you know, mid priced fashion brands struggle with Amazon as a viewed partner is because Amazon is a marketplace and with a marketplace really anyone with a legitimate business can sell. So when you think if you're a fashion brand and you're selling into Nordstrom, you know at Nordstrom that the other brands selling alongside you are reputable quality brands on Amazon there are manufacturers, many of which are based in China, who sell directly on Amazon and so they're selling at low price points and dupe culture is alive and well.
- [29:05]
Jill Manoff
Oh yeah.
- [29:06]
Lara Meyer
And that's why a lot of times when you see these Amazon influencers and their fashion influencers, when they're driving traffic to Amazon, it's often for the Amazon dupes versus the real thing. I see it all the time in my own Instagram reel of like the free people dress versus the Amazon dupe and they mirror one another. And the crazy part is it actually could be the same factory, like, who knows?
- [29:32]
Jill Manoff
Yes. Oh my gosh. So they. So in general, the fashion brands who are being duped, they're just maybe letting the dupes have this time to discount and be cheapy.
- [29:42]
Lara Meyer
Cheap. Yes.
- [29:44]
Jill Manoff
Yeah.
- [29:45]
Lara Meyer
And, and what I will say though is because we work with brands across the board in terms of price point and positioning, is that when our premium or luxury brands do do discounts, the customers show up because it's so rare that that happens. Whereas if you're already a mass price brand, yes, Prime Day is an event. But, you know, getting 30% off a $10 item is not as exciting as getting 30% off a $300 item.
- [30:17]
Jill Manoff
Yes, for sure. I want to circle back you. Because you mentioned tariffs. That was a larger part of the Prime Day planning. I mean, to what extent did that factor into Prime Day decisions? The. The new margins, the new costs associated with tariffs? I would think this was central to the conversation.
- [30:37]
Lara Meyer
Absolutely. And also just the unknown of it all. Fashion is a very tricky category on Amazon for a number of reasons and it's honestly one of the hardest to be profitable. One of the biggest key issues with profitability on Amazon in the fashion category is the high return rates. So on Amazon, like let's say most brands depending on the nature of their product, but typically a fashion brand is going to be somewhere between like 10 and 20% return rate. On Amazon. We've seen fashion brands in some cases have upwards of 30, even 35% return rate. Why is that problematic? Well, one that can cause a lot of waste when items are returned. It's not always deemed fulfillable. So now you have to build that into your P and L. Oh, and now with tariffs, your cogs may be going up 70% and then you have increased cost of customer acquisition. So to. Not to sound too bleak, but it. The fashion category on Amazon is really, really challenging to begin with because you have the Amazon fees. Amazon fees, if you're selling on seller central, are higher in fashion than they are in other categories. Their Referral fee is 17% versus 15%. Although to compete with Shein and Temu, they actually started a new program where I don't know, off the top of my head, I should. After certain. If you're below a certain price point, they drop those rates and fees and then you have the fulfillment and the fulfillment for apparel is slightly above the other categories and then you have return processing, storage, everything else. Those fees add up really quickly. So if a brand doesn't already have really good gross margins going into the channel and they also don't have really amazing creative. That explains your sizing chart. It can be a full start. So we've actually seen a number of fashion brands who did the channel, I'm going to just say incorrectly, where they tried to launch it as a discount retailer or a way to sell their excess inventory or they just really didn't think about the P L component. And so they launched. It didn't go well. They pulled off but then they always come back a year or two later and that's usually when they make the move of hiring an agency and they're like, okay, but we need to do it right this time. And so then that's a planning process around your merchandising, how you're going to support the launch. I'm a really big advocate that Amazon should not be a. An afterthought channel, which is how it's been treated in the past of, hey, maybe we'll just be there. Let's just put like one person on our team to manage the channel. If you're not intentional about Amazon, which is significantly more complex today than it was when I started my agency eight and a half years ago, you're it's going to be a flop. So it can be a very successful channel. We've launched $100 million fashion brands on Amazon, as in they did a hundred million in their second year on Amazon type situation. And so it can be done and it can be profitable, but you have to have the right people in place internally. And if it makes sense to have a part, an agency, partner or consultant. But then you also really have to know your financials because if the financials aren't working, it's never going to work as a channel. Long term.
- [34:25]
Jill Manoff
Yes. What are some of those secrets? Like how would somebody make $100 million? I are they.
- [34:33]
Lara Meyer
Is it all brand recognition really helps? You know, you hit a point of critical mass.
- [34:39]
Jill Manoff
But is it all digital ads and like paying for. Yeah, the advertising across Amazon and beyond and influencers. Yeah.
- [34:48]
Lara Meyer
But also honestly, where I think a lot of Fashion brands miss Amazon is they don't merchandise Amazon correctly. And so evergreen styles, as boring as it is, it works really well on Amazon because when you think about how the Amazon algorithm works, again, it's not like Nordstrom or Saks or even Revolve where they curate their feed based on newness. Amazon's algorithm actually is the opposite. Right. It is rewarding listings that sell the most units and the most units, or the listings that sell the most units, they have legacy, they have reviews, they have momentum and the psyche. And Amazon is super interesting because if you see a really attractive sundress, are you more inclined to buy the dress with 2000 reviews or 2 reviews, even if that 2000 reviewed listing has maybe been there for 5 years?
- [35:53]
Jill Manoff
True. I never thought of that. You're so right. You're so right. When it comes to, like, why, like, brands finally come to you, they're finally ready to pull the trigger. We want to launch on Amazon. Is the whole. Is it mostly about, like, we want to offer that convenience, we want to offer that shipping. We can't do that ourselves. That's what our customer is looking for. Is it all about that?
- [36:16]
Lara Meyer
It's about being where your customer shops?
- [36:19]
Jill Manoff
Yes.
- [36:20]
Lara Meyer
What's interesting about Amazon is you can have someone in the same transaction purchasing a household item as well as a very expensive beauty product or clothing, apparel, etc. And that's just how that customer shops. Amazon has always held having the highest household income consumer comparative to a lot of other retailers. I mean, especially Walmart, but in terms of the other marketplaces. So there are a lot of people on Amazon who are prime customers who have disposable income. And it's kind of like the classic Anna Wintour, right. Of Zara jeans with a $10,000 bejeweled sweater. Like, that's your Amazon customer.
- [37:13]
Jill Manoff
Totally. Our brands coming to you basically, like, we're on Amazon anyway. Like, I'm seeing so many brands that don't have an official Amazon partnership that are on there via the partnership with Saks or the partnership with Rebag and other resale platforms. I'm sure they hate it. Like, what. What are you seeing there?
- [37:33]
Lara Meyer
So that's, that's the other issue in fashion is whether you're selling to Zappos or Shopbop or Saks, then you're competing for the buy box if you're selling the same inventory. So now you have this dynamic of, okay, well, hey, I'm a brand. I really want to own our Amazon presence, but I've already sold all this inventory to Shopbop, which is an Amazon subsidiary, but they have their own storefront and they sell on Amazon as well as the Shopbop storefront or webpage. And then you have this dynamic of, well, now I'm not owning my customer on Amazon because I have this wholesaler represented. So this goes back to my point about you have to be very intentional in merchandising and just launching on the platform overall. So something we've done for other fashion brands is they don't want to totally pull the plug or disrupt their shopbop relationship. So we work with them to curate what inventory are they going to own selling on Amazon versus what inventory will they sell?
- [38:38]
Jill Manoff
Shopbop.
- [38:39]
Lara Meyer
And in some cases, it's totally different types of apparel. Maybe Shopbop gets the exclusive to two colors and you have the three other colorways. There are different ways to do it, but in an ideal world, you own your Amazon presence completely.
- [38:58]
Jill Manoff
Yes. And it's about. Is it about dodging counterfeits as well? Like if you. Does that work?
- [39:05]
Lara Meyer
Counterfeits? I mean, counterfeits. Dupes that absolutely exist. But from my perspective, it's really about understanding the customer journey. So what a lot of brands overlook is that Amazon, yes, is a sales channel. It's a convenience channel, but it also today is very much a brand Discovery Channel. And if you're full, if you're a brand and you're fully owning the channel, you know, you don't have all these other distributors selling your brand and you're selling on seller central or even now vendor central through Amazon marketing cloud, you can really track your customer journey. So now you can start to remarket customers who purchased from you in the past. When you launch a new collection on the site, you can really keep them in your funnel and making sure that you're really giving attention to your Amazon customer. And the other thing that we've seen over the years is we've launched and scaled fashion brands on Amazon is that they're really, if you merchandise correctly, there really hasn't been a cannibalization of their D2C. There's this anxiety and it's in every category. It's in beauty, it's in baby. It's not exclusive to fashion. Where these DTC native brands are so afraid of disrupting their precious channel. And what we've seen is even on Prime Day, DTC sales don't take a hit when they're running deals on Amazon. Because, yes, there are so many customers out there who shop Amazon and DTC sites. But there is also this siloed consumer habit where people exclusively shop Amazon and people exclusively don't and it all goes back to being where your customer shops. The other thing is Amazon is a massive advertising powerhouse now and you can now even use Amazon advertising to drive traffic to your own dtc. So now you can even remarket Amazon luxury fashion consumers to your own D2C and have this omnichannel approach as well.
- [41:26]
Jill Manoff
Really nice. Would. Would you say? So I was going to ask about that kind of basically in a different way, like being on Amazon. The concern is that it's going to like dilute your brand or it's going to. I was going to ask if it's having an impact on other channels. So in general, no, we haven't really.
- [41:43]
Lara Meyer
Seen seen that be the case. The, the only scenario where we See Amazon Disrupt D2C is if a business is very subscription focused on their dtc. And that's not as common in fashion. But you know, I have seen it like undies, subscription clubs or something like. And then if they sell individual or three packs on Amazon, then yeah, that's going to disrupt their D2C because most people don't want to commit to subscriptions anymore anyways.
- [42:14]
Jill Manoff
True, true. It's funny that you were mentioning kind of all of the extra costs for fashion and I question, like, do you think we've always said like Amazon is going after fashion? Like, are they? Like, it's.
- [42:29]
Lara Meyer
I just think fashion is a really hard category, like not to poo poo on it. But you know, you have. Yes, there's high consumption of fashion. You know, people do buy clothes frequently. Jill and I are both guilty of.
- [42:43]
Jill Manoff
That probably for sure.
- [42:48]
Lara Meyer
But the other thing is you have sizing and then there is this whole culture of buying and returning. I'm going to order two sizes. And it's interesting because I've actually spoken to some of my fashion and footwear clients and I'm like, hey, how do we start a campaign to really educate the consumer about the environmental impact that their return habits have? Like obviously there's the P and L impact for the brands themselves, but I am very passionate that there should be some type of broader campaign of like why you should take the two seconds to just measure your waste and order the correct size versus buying two and then you have the carbon footprint of shipping it to you and returning it. But more importantly, if it's ripped open or tags are removed, it typically goes into unfulfillable, which goes into a landfill and is incinerated so now you have all these natural resources to create it and then it is never even worn or used.
- [43:51]
Jill Manoff
Not great. On that note, so this podcast. You're such a downer, Lara. No, on that note, we're recording in the middle day two and this will go live on day four for final day of Prime Day. So you're looking at kind of success early on, but now is it just a question mark? Like we think we landed great, but now what how much will be returned? Like do you think, do you talk like that?
- [44:16]
Lara Meyer
Yeah, I mean I think with Prime Day overall I still think it's going to be a phenomenal event. Like 90% of our clients be day one of last year, which again that was a two day event. So we didn't know if the average sales day would actually be a little bit lower. It turned out at least yesterday it wasn't. And the other thing that I think is going on to tie back to the tariff conversation is now tariffs are still an unknown. We'll find out what happens August 1st. And I do think customers are surplus buying in preparation. So there is a concept that maybe if you have a great Prime Day, you could be taking sales from your future August and September transactions. But the big thing that we see time and time again is the ability to acquire new to brand customers during Prime Day. And that's what's really exciting. And that's why this is such a pivotal event for a brand every year is having a successful July Prime Day is what sets you up for a successful H2 for the year.
- [45:24]
Jill Manoff
Right on. Did some opt out of Prime Day because they were worried about inventory due to tariffs?
- [45:31]
Lara Meyer
We did have some brands not participate as a result. But for the majority our our clients are because if a brand is working with an agency they usually see Amazon as a growth channel. So they they want to play the the Prime Day game. It's if you can participate in any in only one temple event a year on Amazon, it's July Prime Day. You don't have to do Black Friday. You don't even have to do October. July is the one that you have to commit to.
- [46:03]
Jill Manoff
Oh my gosh. Exciting times. I'm excited to see the sales data. But yes. Laura, thank you for being here. This was so educational for me.
- [46:12]
Lara Meyer
Thank you so much.
- [46:18]
Jill Manoff
That's all for this episode. Our theme music is by Otis McDonald's. If you liked this episode, be sure to share it with someone else you think would. Thanks for listening to the glossy podcast.