How Echo Look could feed Amazon’s big data fueled fashion ambitions – TechCrunch
This week Amazon took the wraps off a new incarnation of its Alexa voice assistant, giving the AI an eye so it can see as well as speak and hear. The Echo LookÂ also contains a depth sensor thatâs being used, in the first instance, toÂ create a bokeh effect for aÂ hands-free style selfies feature that Amazon is hoping willÂ sell the deviceÂ to fashionÂ lovers, by making their outfits pop out against the bedroom wallpaper, and making themÂ more eager to socially share.
The Echo Look app is where users can view the style selfies (and videos) theyâve asked Alexa to recordÂ for them (sheÂ indefinitely stores a copy for Amazon too). But the flagship feature of the app isÂ a fashion feedback service, calledÂ Style Check, which Amazon says will utilizeÂ machine learning to rateÂ fashion choices and help users chooseÂ between outfit pairs. And ultimately, presumably, giveÂ their entire wardrobe a score. Albeit, the featureÂ is usingÂ (human) stylists too, at least for now, to help train what Amazon surely hopes will beÂ entirelyÂ robotic style recommendations down the line.
The app will also suggest clothes for users to buy based on their style selections â opening upÂ another revenue stream forÂ Amazon, and one that could prove pretty sticky if Echo Look delivers on itsÂ promise of furnishing usersÂ with a personal stylist whose killer feature isÂ the ability to shop tirelessly on yourÂ behalf. This new voice-controlled,Â Internet connected Echo cameraÂ is designed toÂ condition usersÂ to feedÂ it with the training data Amazon needs to buildÂ a fashion savvyÂ AI. As data grabs go, itâs exceedinglyÂ well dressed.
As I wrote in July 2015, adding a camera to Echo makes perfect sense for Bezosâ massive fashion ambitions. With an eye to see you, Echo Look promises to contain yourÂ self-image better than a mirror by claiming to knowÂ which of your outfits is the fairest of them all. Fashion is often sold as something feel good andÂ confidence building â a way to belong and blend in within a peer-group. But equallyÂ style can be deliberately different;Â the essence ofÂ individual self expression. So whether thereâs an AI that can usefullyÂ cater to all those differentÂ facetsÂ remains to be seen. But for many shoppersÂ the primary desire they haveÂ for the clothes they wear can be boiled down to looking good. SoÂ Amazon is positioning AlexaÂ to sell that hope as a service.
Buying clothes is a recurring need; both a practical necessity andÂ a way to keep up with changes inÂ style and taste. Like buying groceries, itâs a type of shopping without end. WhichÂ is why Amazon is fixated onÂ both spaces. âIn order to be a $200bn company weâve got to learn how to sell clothes and food,â Jeff BezosÂ saidÂ as long ago asÂ a decade â displaying the long term thinking that has enabled the ecommerce giantÂ to slow-grow its business over more than 20 years from an upstart online booksellerÂ into todayâs sprawling digital marketplace whose upwardly thrustingÂ arrow declaimsÂ its mission to deliver everything.
From household staples to fashion destination?Â
Amazon Prime is the membership club that sells a subscription toÂ convince peopleÂ to lock themselves in to buying more and more from Amazon. Notably, a recentÂ addition to the Prime perk list is anÂ Amazon own brand menâs dress shirt brand, called Buttoned Down. Here the companyÂ is selling wardrobe staplesÂ that, if they bore a different label, would cost a whole lot more.
And while a fairlyÂ uniform garment like a dress shirt can makeÂ an easy recurring purchase, i.e. once youâve figured out which size fits you, a lot of fashion is intentionally far less predictable. MeaningÂ thereâs a muchÂ greater need for style-related try ons. Female fashion especially falls into this category â hence Amazon heavily focusing theÂ marketing for Echo Look on womenâ¦
Amazonâs vast strength is how its various parts link and pullÂ together (like Prime) to build lock-in byÂ embedding more and more utility into the core platform. SoÂ Echo Look â which at first glance might seem a bit of a niche product (at least from a male perspective) â is designed to lay importantÂ groundwork for Bezosâ big bet on fashion. The company has already launched a swathe of its own clothes brands in keyÂ markets. Now, givingÂ Alexa theÂ gift of sight, opens the opportunity for AmazonÂ to get a far more intimate perspective onÂ how its customers think about fashion as they try things on in the privacy of their bedroom âÂ asking Alexa to be their fashion judge.
At the same time the Echo Look aims to shift how Amazon users experience fashion buying via the marketplace. This latest Alexa-enabledÂ incarnation means Amazon is no longerÂ primarily a vast, impersonal warehouse thatÂ hasÂ toÂ be manually data-mined to unearth threads youÂ want to buy; rather it becomes a style destination in its own right; an app thatâsÂ savvy about fashion trends and understands personal taste so it can do the leg work and shop for you. At least, thatâs the pitch and the promise.
The ecommerce juggernaut that Bezos controls â AmazonâsÂ market cap is now a staggering $439 billion â hasÂ not merely been growing in momentum and marketshare because of the hugeÂ inventory it aggregates and makes discoverable in myriad different ways. But, at least in key markets, because itÂ has fixated onÂ delivering convenience at faster and fasterÂ speeds â buildingÂ distribution and shipping infrastructure that can all butÂ eliminateÂ the practicalÂ difference between buying online vs shopping in store. Itâs not quite instant gratification but in some cases Amazon isÂ pushing very close indeedÂ â with one-hour delivery in some urban areas forÂ a sub-set ofÂ products, andÂ even delivery within 15 minutes viaÂ its experimental Prime Air drone trialsÂ (and evenÂ eyeing someÂ crazierÂ deliveryÂ ideas than those).
Amazonâs ecommerce imperativeÂ isÂ to work towards excising the middle ground andÂ going direct to theÂ customer where the most money is to be made. In fashionâsÂ case thatÂ not only means luring consumers away from retailersâ bricks and mortar stores but, increasingly, moving in on the fashionÂ labels themselves. After all, manyÂ clothes arenât bought principally or specifically for the label they bear, but for the utility or passingÂ color they offer. Amazon wants â and clearly feels â it can dominateÂ those types of clothing purchases.Â It has the scale, ambition, speed and data to cut itself a very sizable chunk of the fashionÂ market, reckons Tom Adeyoola, founder of UK fashion tech firmÂ Metail â which has been working on rethinking theÂ online fashionÂ buyingÂ experience withÂ virtual fitting room and garmentÂ digitizing technologyÂ for almost 10 years.
Not just basics and low cost garments that might otherwise have been purchasedÂ at a supermarket â but High Street fashion, glossy catalogue brands, and other online clothes retailers. Amazonâs own brand ambitions on the fashion front look almost absolute. At this point itsÂ own brandÂ fashion labels include: womenâs fashionÂ (Lark & Ro, Society New York) and accessories (North Eleven); childrenâs clothes (Scout + Ro); mensâ suits (Franklin Tailored) and dress shoes (Franklin & Freeman). Workout clothes are also apparently incoming.
âI think the industry has been very complacent because theyâve said nobodyâs going to buy fashion on Amazon,â saysÂ Adeyoola. âYouâll buy cameras and stuff but youâll not buy clothes. But theyâre forgetting that Amazon thinks in five to seven year timeframes. Theyâve got all the customer relationships, and theyâre good at data, and theyâre good at logistics, and theyâre good at inventory managementâ¦ Amazon went from zero [in clothes sales] to number one in the US in four years.â
ItâsÂ not hyperbole to say many fashion brands and retailers areÂ facing a doomsday scenarioÂ if Bezos is ableÂ toÂ realize the scale of his sartorialÂ ambitions. After all, the difficulty of being aÂ brand trying to make yourself heard and monetizeÂ on someone elseâs platform is already writ large in the smartphone space, where big name brands are boxed into same-sizeÂ apps, competing with each other forÂ discoverability and diminishing attention returns while the platform masterÂ sits above the fray, controllingÂ access and â crucially â knowingÂ what the user reallyÂ wants.
Adeyoola says the retail opportunity Amazon is closing in on is the huge wastefulness of the traditional supply chain, where healthy profit margins are squandered with poor inventory management â in turn a consequence of aÂ failureÂ to understand the transformative power of big data.
âIn clothingâ¦ RRP, in general, the starting point of margin is towards 80 per cent. So manufacturing is only about 20 per cent of that cost. But all of the retailers are making around, at best, three per cent profit. You look at somebody like Asos in the last four or five years, theyâve more than doubled sales but their absolute profit number is the same. Theyâve added sales for no profit. So Amazon can look at this and say: hold on, youâve got 80 per cent profit and you waste it all â this is our opportunity. Talk to a manufacturer and theyâll say that inventory management and everything to do with data is where the retailers are just lazy. Theyâve been lazy for too long. And thatâs where Amazon is really good. So, in my mind, I look at it and say Amazon could double manufacturing cost, take their standard five per cent or less margin and still be half the price of everybody on the retail market.â
Even if AmazonâsÂ consumer frontdoor has remained fairly consistent (at least until the original Echo popped up), BezosÂ has spend years honing backend infrastructure and tooling up supply chain expertiseÂ in the areas heÂ wantsÂ to dominateÂ â positioning AmazonÂ to be able to offer a more compellingly priced product than high street fashion retailers andÂ still make its margin. SoÂ while retailers continue to waste money on inventory management, Amazon is aimingÂ to use data to eliminate inventory entirely.
Earlier this month, for example, it was awarded aÂ patent for an on-demand clothes manufacturing warehouse that suggests an intent toÂ push the boundaries ofÂ fast fashion even further. AmazonâsÂ end game looks very much likeÂ garmentsÂ made on-demand, locally at the point of order â vastly shrinking its warehousing and shipping logistics costs in the process. Amazon couldÂ seed data-fed, just-in-time manufacturing hubsÂ in urban centers toÂ service demand locally, enabledÂ by knowing exactly what itsÂ customers want, arguesÂ Adeyoola.
âThereâs just much less friction,â he says of theÂ Amazon approach. âSo sure they donât have a great consumer user journey now, but they will do â and in the interim theyâve been doing, effectively, what weâre trying to do, which is digitize the world. Theyâve been accumulating all the brands and all the clothes, and getting them onto the system and then learning and understanding where the white space is.â
HeÂ points toÂ b2b apparel maker theÂ TAL Group, which claims to make one in every six menâs shirts sold in the US. But the question is, for how much longer? While its button down dress shirts are priced by retailer partners at $80+, last month Amazon launched their own brand (the aforementioned Buttoned Down) â selling shirts starting atÂ $40. Thatâs calledÂ disruption, Jeff Bezos style.
AndÂ while Amazon has been using data to optimize itsÂ supply chain for years, traditional fashion retail and brands are still saddled managing networks of bricks and mortar stores where theyâre seeing falling footfall. These physical locations have arguablyÂ convinced retailersÂ to view the Internet asÂ just another sales channel, rather than the vital data pipe needed to overhaul all their business and supply chain processes in order to survive as mobile platforms consume their world.
Again, you could draw a parallel with a former smartphone giant like BlackBerry fixating on its physical Qwerty keyboardÂ as a new generation of app-focused touchscreen devices swept in to change everything. Even if some fashion retailÂ giantsÂ technically have the scale andÂ resources to adapt to the big data era, none apparentlyÂ has the long term convictionÂ to take the plungeÂ â which is enablingÂ Amazon to pushÂ in and sew upÂ marketshare.
âI think the trend is very straightforward,â saysÂ Adeyoola. âIn the old days of retail, the battle was for footfall in a shopping mall, footfall on a high street. Now that traffic is time on a phone. So if you think about it in those terms, the channels where retail is going to happen are going to be in those places which have the most time on your phone. So all of the guys who take up the most time and have those customer relationships are going to be those new retail channels â so it is going to be Amazon, it has to be Facebook, it has to be Google, it has to be Apple. Those guys are going to be those portals through which youâre going to do retail, because thatâs where you spend all your time. And all the retailers that have been spending their time building their own websites and building their own apps â you canât fightâ¦ You will be like a shop in a shopping mall and the shopping mall is just going to be the Amazon app,Â the Facebook app. And hence the middle retailersâ¦ just wonât exist. Youâre going to have to have a real battle to position yourselves in terms of what are you about.â
Plus, remember the Echo LookâsÂ on-board depth sensor? Such hardware could be used to size up peopleâsÂ full length selfies, enablingÂ the AI toÂ automatically know its ownerâs size and recommend correctly sized clothes to buy. At scale, taking measurements from multiple Echo Look owners, Amazon would start toÂ build its own dataset for size and fitÂ â to use to further feed its clothes manufacturing efforts byÂ enhancing and better customizing garment fit for its own fashion labels. Even â ultimately â to offer garments that are customÂ tailored to individual Amazon users, on demand but at fast fashion prices.
Adeyoolaâs prediction is an entire disintermediation of the retail manufacturing supply chain. âA natural end state for me is that somebody like an Amazon can put manufacturing right next to its distribution hubs â all of its distribution hubs are optimized for urban centers, you can put manufacturing in those urban hubs,â he tells TechCrunch. âSo if you get enough consumer data then you just create the marketplace for design and you basically make everything just in time, made to order. So you get rid of the inventory problem, you get the stuff made right by the distribution centers to go straight out. And if you had body size and shape data â thatâs what weâre aiming to produce and deliver at scale â you could then basically shrink that time, you can also move towards an end state of made to measure, and you can deliver within a Prime window.â
TailoredÂ fashion at scale is not all thatâs potentially unlocked by the Echo Lookâs depth and trend sensing eye. Another technology that could be delivered via this connected camera plus app set-up isÂ virtualÂ try ons, with the productÂ becomingÂ a trusted conduitÂ for Amazon to ask for and receive full length body size measurements, captured from usersâ hands free Echo LookÂ selfies. With that data it could build anÂ accurate 3D body model for each shopper, and â combined with an inventory of digitized garments â the Echo Look app then becomesÂ a virtual changing room where users couldÂ play around trying garmentsÂ onÂ digitally before theyÂ buy.
Virtual try on could be anÂ important piece for Amazonâs fashion ambitions becauseÂ buying clothes isnâtÂ always just aboutÂ about fit â especially if youâre contemplating buyingÂ higher priced, more experimental fashionÂ vs wardrobe staples thatÂ people canÂ be comfortable buying without trying. Technology that enablesÂ consumersÂ to judge whether a just encountered fashion style suits without having to physically pull it over your headÂ is what virtual fitting room startups such asÂ Metail have been working on for years;Â aiming to remove aÂ last key differentiator for Internet shopping vsÂ bricks and mortar clothes stores. It may not yet be mainstream â but the promise is clear.
And with theÂ Echo Look, Amazon mayÂ have created the perfect arenaÂ to slot in this lastÂ piece to crown its fashion ambitions. Then,Â with a savvy AI to recommend styles, a virtual body doubleÂ to envisageÂ how potential purchases look, and local manufacturing that supports very fast shipping the ecommerce giantÂ isÂ in a position toÂ convince usersÂ thereâs no practical need to ever visit an actual clothes store.
âPeople are time sensitive, and weâve learnt and been programmed now, through the likes of Uber etc, that getting something quicklyâ¦ is possible,â adds Adeyoola. âWith Amazon Prime Now you can order something and it be there within an hour. So then why do I need to go on a busy Tube train, travel for an hour to a high street and get hot and bothered?
âBack in the day going to the shopping mall used to be a leisure activity and fun. Itâs just not that anymore. There are other ways to have fun.â
So when does he think Amazon could be inÂ a position to deployÂ virtual fitting roomÂ technology? Adeyoola reckons itÂ could bring somethingÂ to market inÂ two years â should the companyÂ decide it needs to push into the 3D creation space. For now, he reckonsÂ itâs not clear they are convinced they need itÂ yet. But Amazon isÂ certainly paving the way to acquire data that could powerÂ it.Â (On that front itÂ also boughtÂ another 3DÂ startup focused on fit for shoes, Shoefitr, back in 2015.)
âThe approach that theyâre taking with that selfie Look is a low risk one â which is basically to see whether people will buy the product and use it. And the way that the product is coming out is one which is a computer vision way of learning style, so they want people to take pictures of themselves in garments, and then theyâll try and use computer visionÂ â well, theyâll going to use real stylists to start with to rate stuff â and then off the back of that work out whether they can basically build an algorithm which can say this is good, this is bad, and then start to use that as a recommendation flow longer term. Which is big, smart value.
âThey havenât thought about going into the 3D creation space thus far. And I think thatâs because they say, well weâve got datasets and weâll use our datasets to improve as a starting point. So I havenât seen evidence of them wanting to make that jump. And I think theyâre probably thinking theyâre best place to buy it when they feel itâs tipped over into being a need, rather than still in R&D phase. So, for a startupÂ like us, having been invited to speak at their European partner conferenceâ¦ I think it was a means for them to test where weâre at â and see at what point they might need to either consume or crush.â
At the end of the day, if Amazon can deliver on aÂ big data vision of custom tailoredÂ garmentsÂ in fashionÂ styles it already knows customers wantÂ â and shipÂ orders to buyers within a matter of minutesÂ â why then, the bedroom in yourÂ own homeÂ effectively isÂ the changing room.