Photo: Calvin Klein
Amazon launches exclusive with Calvin Klein
Amazon.com is selling an exclusive collection of Calvin Klein underwear this holiday season online and at two pop-ups in New York City and Los Angeles.
The Wall Street Journal notes that this marks the first time Calvin Klein is not providing “first dibs on its latest styles” to department stores.
Calvin Klein was among the first fashion brands to start selling a limited selection of items, mainly underwear and jeans, on Amazon about 10 years ago at the risk of irritating its department store partners and hurting its brand image. Brands such as Kate Spade, Nike and Levi Strauss have followed suit in directly selling to Amazon.
Retail Dive notes that Calvin Klein’s move carries the “risk of Amazon evaluating their best sellers and basing its own Essentials items on the performance.”
“We want to reach consumers wherever they are shopping,” Cheryl Abel-Hodges, president of PVH’s underwear group, told the Journal. “Digital is one of our fastest-growing channels, and Amazon is a really important part of what is happening in digital.”
Amazon’s two pop-ups further the company’s wide range of experiments in physical retail. Among the features:
- Shoppers can purchase in-store or scan a bar code in the Amazon App to have items delivered to their home.
- Amazon Echo devices in fitting rooms allow shoppers to ask Alexa questions about the Calvin Klein product and experience, control lighting features and play music.
- Customization stations allow shoppers to personalize their purchased underwear with special embroidery.
- Content creation spaces encourage shoppers to create their own sharable social media clips.
- Shoppers can use video chat to interact with the Sacramento pop up and vice versa by way of the Amazon Echo Show.
- Supermodel and entrepreneur Karlie Kloss and comedian and author Lilly Singh will host special events at the locations.
“We are delighted to team up with Calvin Klein to provide a fun, interactive experience that connects our customers to product in an engaging way,” said Michelle Rothman, VP at Amazon Fashion, in a statement.
- Calvin Klein, Inc. Announces Holiday Retail Experience with Amazon Fashion – Phillips Van Heusen/Business Wire
- Nothing Will Come Between Amazon and Its Deal for Exclusive Calvins – The Wall Street Journal
- Amazon’s exclusive deal with Calvin Klein is about much more than underwear – Quartz
- Calvin Klein opens holiday pop-ups with Amazon – Retail Dive
Discussion Questions
DISCUSSION QUESTIONS: What significance does Calvin Klein’s exclusive deal have for Amazon, fashion brands and department stores? Should exclusives become a bigger part of Amazon’s fashion push?
Poll
BrainTrust
Min-Jee Hwang
Director of Marketing, Wiser Solutions, Inc.
Chuck Palmer
Senior Advisor, ConsumerX Retail
Calvin Klein’s decision is part of a broader movement by brands to prioritize Amazon ahead of other channels — like department stores. Ultimately, brands will focus on the channels that provide access to the markets they care about and Amazon’s ability to do this is undeniable. Exclusives are powerful differentiators, but Amazon is also about endless selection. While important, I’m not certain that exclusives are as important to Amazon as they are for most every other retailer.
I think these decisions by suppliers are bad long-term decision for the short-term pop they will get. It is like getting in bed with the devil — they are giving up on all other channels by pushing Amazon as the number one channel and this would kill off any DTC channel they may have as well. If they went with only a small subset of products to grow brand that would seem to be more effective and a good use case. I suppose if you don’t believe your brand is strong enough that people will seek it then this is a fine idea but I would rather build a brand that people seek than a brand of convenience.
This move sends a clear signal to department stores, that Amazon is far more important to a brand’s growth than traditional retail. Fashion brands may want to re-evaluate their Amazon strategy as well and get into the game while fashion is still in its infancy on Amazon.
But Calvin Klein is smart. Amazon is where the consumer is shopping today and developing that relationship with Amazon is the right thing to do to stay relevant to the consumer.
Brands, in general, are a bigger part of Amazon’s growth push. Migrating away from an open marketplace with multiple sellers competing on price, to a more controlled marketplace selling brands is Amazon’s future. Hence the development of the improved Brand Registry.
Amazon is the department store of the future.
Exclusives are a great fit for Amazon. The “virtual shelf” provides the perfect operational environment for one-off and exclusive line promotion. The strategy also fits Amazon’s goal of being a mainline retailer. Just as Target leveraged exclusive designer lines to differentiate, so can Amazon.
Increasingly, brands must go to where the customers are — and increasingly that first stop of the customer journey is Amazon.
Beyond the exclusive brand deals with Amazon, the list of bullet points of what is occurring in the Amazon pop-up stores should strike FEAR in the hearts of retailers with stores.
As described, Amazon’s popups are offering a more comprehensive, more creative and more engaging customer experience than you can find in any traditional store. Amazon’s foray into reinventing stores for peak customer engagement and personalization is far more of a threat than exclusive offerings with brands.
Department stores have only themselves to blame for this. They have long since lost their status as one of the primary channels through which consumers want to discover new and premium products. Calvin Klein’s decision is just part of the shift to brands seeking out more effective routes to market.
Calvin Klein is smart to recognize that times are changing combined with, “if you can’t beat them join them.” Partnering with Amazon is very smart, and I particularly like the pop-up concept as well. We can’t always assume that the customer will find everything online. Having an opportunity to see the product for real provides additional sales opportunities. So I believe both Amazon and Calvin Klein will achieve great success with this partnership.
As department store sales sag, brands need to be where the shoppers are — that means Amazon. Calvin Klein has not been afraid of experimenting with Amazon. This effort is the next logical step. Win or lose, it will provide valuable information to Calvin Klein and Amazon, and a potential way forward for other brands.
Amazon has been reaching out in all directions, both retailer and supplier, in the past year — the acquisition of Whole Foods and the partnerships with Kohl’s and Sears, for example — to create a more powerful selling entity. This is another step in that direction; it will make Amazon a more dangerous competitor with a high-visibility exclusivity. For Calvin Klein, it’s a good move that recognizes that the balance of competitive power between brick-and-mortar merchants and online retailing is altering.
I don’t see anything new or innovative in this negotiate-what-you-can deal. There is no huge win for any party, least of all the consumer whose frustration with sourcing options is simply increased — all to benefit a little PR blip for Calvin Klein and Amazon, mostly Amazon I am sure, which shows it can flex its shelf-to-consumer retail muscle, as any other retailer would. Yawn.
Calvin Klein is just bowing to the market power. Is it a good idea? Probably not, anymore than it was a good move for Gitano’s to go exclusively with Kmart decades ago. As to whether exclusives should become more important to Amazon — yes, if you are Amazon; no, if you are a branded manufacturer.
In the mid-1990s I had the privilege of working with Levi’s on a new go-to-market strategy that included a new demand fulfillment model by “going where the customers shop.” For a brand like Levi’s that meant distributing significant volume into Walmart — a highly controversial decision at that time.
Today’s Amazon has many parallels with the disruptive role that Walmart played for branded manufacturers 25 years ago. These are strategic decisions with long-term impact on brand equity, growth and margins and should not be taken lightly. In the case of Calvin Klein (and PVH overall), this is a necessary step to remain in sync with how consumers shop and experience their products.
For Amazon, exclusive tie-ups create further excitement and more reasons to shop Amazon. Over the longer term, these will help to establish a fashion connection with the Amazon brand.
Amazon Fashion + Calvin Klein.
Yawn.
This feels more like a desperation play for both. If Amazon is seeking fashion credibility, I’m not sure Calvin Klein is going to deliver that. This feels like PVH and Amazon convincing themselves this is a good idea; it seems like it is much more about marketing (by throwing mud against a wall to see what sticks) than it is about consumer relevance.
Regardless, the data will be assimilated and resistance is futile.
This is another harbinger of the evolving future (fate?) of brick-and-mortar retail. Brands are are continuing to figure out processes to communicate directly with their customers. Customers are just shopping! They don’t know, nor care, about “omnichannel” — they just take the shopping journey of least friction. If that happens to be Amazon then brands need to make certain they are available on that path.
Amazon has made its intentions about expanding its market share in fashion quite clear and this validates this mission. While fashion brands want to protect the brand and initially resisted selling through Amazon, many are now jumping in, as the revenue opportunities are quite attractive. This approach is a good way for Amazon to accelerate their path to change consumers’ perception and become the starting point for fashion merchandise searches – just like they are for other product searches.
Fashion brands should be cautious, as what starts out with an exclusive product play may evolve to something much more than that. Amazon has disrupted other categories, such as electronics and department stores, and they have the power to do the same thing in fashion.
Amazon has already launched private label brands and now has exclusive premium brand apparel. If I were an apparel retailer, I would be very afraid….
This deal presages the future for a huge portion of retail: Department and Specialty retailers. It really begins to show what a future can look like in a hugely important channel — an important brand with a lot of consumer appeal going to market via a partner that is providing innovative shopping experiences where and how consumers want it. This should be a major wake up call. Bigger part of Amazon’s fashion push? Those foot steps I’m hearing say “It certainly will be.” Next roll-out of another push will probably be only a matter of weeks away.
This marks the beginning of a totally new strategy for this Calvin Klein, as well as other brands that generally have a tendency to keep their “exclusive” product lines off Amazon. But Amazon wooed CK with some really interesting ideas, which may give an indication of Amazon’s future retailing model.
What does this mean for brands?
Firstly, like the landmark Nike deal where Amazon agreed to proactively manage unauthorized third-party sellers on the brand’s product listings, it indicates that Amazon is actually willing and able to pull out all the stops for brands that it really wants to work with.
Secondly, Amazon wants exclusive products. They want to have an edge with their assortment so that customers continue to want to shop on Amazon first.
Finally, brands like CK are recognizing that their previous core customer (department stores) is dwindling, and they should just invest where customers want to shop – on Amazon. Brand discovery and engagement is still important though, hence the unique pop-up store.
This move is all about relevance. Both Calvin Klein and Amazon are trendy, so they are a natural pair. Could you see a department store doing this? Neither could I. Amazon stays fresh through constant experimentation and Calvin Klein is smart for signing on. The “cool” factor may sell more products and Amazon will learn a great deal from the brand that it can apply to its own fashion brands.
That’s a really smart move by Calvin Klein, by selling an exclusive collection on Amazon which in turn makes it even more exclusive. Considering the market presence, reach and customer variety of Amazon, this will not only lead to more sales for the product, but also can be leveraged for higher margins by the retailer. While that was for Calvin Klein, for Amazon also this is win-win situation as it will get an exclusive collection of a premium brand on its endless aisle!
This is a significant deal for Amazon. Amazon has, of course, built a name for itself on the back of its convenience and range — it is the best place to buy products quickly, and get them delivered even quicker.
However, the high street has always had an edge in two ways: firstly, it has deeper relationships with the main brands; bricks and mortar stores have always been able to get access to exclusive products, and ranges of products. Secondly, the high street has been able to offer customers a more tailored and intimate shopping experience.
This new deal with Amazon is a firm strike against the first edge. It means that high-street retailers can no longer depend on exclusive brands to set themselves apart from online. The conclusion is that physical stores need to double down on their second strength: the intimacy of the shopping experience.
I wonder how significant this exclusive is to Amazon (in terms of sales/traffic etc) or whether it’s more a means for them to test out more of their plans for physical spaces. I find the details of how the pop-ups work very interesting. The use of Alexa in fitting rooms to control lights etc and answer questions seems like a very cost-effective option for retailers to add this kind of functionality to their spaces. For Calvin Klein it seems a good way of increasing visibility of the brand at a crucial spending time, but without putting too much product through Amazon — assuming that it doesn’t just drive customers to return to Amazon for their Calvin Klein purchases!
It’s the late recognition by Calvin Klein that the centre of gravity of reaching new targets is shifting from brick-and-mortar to online. Amazon, the leader in online retail, is the best place to have presence even if it means annoying their existing physical store partners.