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01.17.18

The Amazon Playbook for Market (and World) Domination Includes Fashion

by Ben Gaddis

Originally published on Ben Gaddis’, President of T3, LinkedIn page.

With the acquisition of Whole Foods, Amazon and Bezos have hinted at their playbook for dominating new markets. What industry is next? We think fashion is ini their sights.

With all of the chatter surrounding Amazon, it seems like people still haven’t figured Jeff Bezos out. As crazy and innovative as everyone makes him out to be, he makes fairly predictable business decisions and seems to follow a tried-and-true playbook. Here’s a simplified breakdown:

  1. Identify a key market riddled with inefficiency and poor customer service.
  2. Optimize manufacturing and distribution.
  3. Find a brand people love in that market. Buy it. Run everything through that brand and enable one click.
  4. Print cash. Become the world’s richest man.
  5. Rinse, wash, repeat.

With a clear view of the future of grocery through the lens of Whole Foods, it’s not too hard to see where things are headed. The brand has been purchased, so we’re bound to see the big brains of Amazon change how everything operates at the grocery chain—and what everyone comes to expect from it.

What Industry Is Next?

The question we should all be asking ourselves, though, is what’s next? What is the next industry in Amazon’s sights, and which brands are the best fit for Bezos and crew to acquire?

If it were me, fashion is the obvious next threshold. Amazon already has a fair amount of skin in the game, though with all of their moving pieces it’s easy to miss it. They acquired Zappos, the internet’s favorite shoe store, back in 2009. Zappos has declined in the past few years, but the acquisition was a friendly way for Amazon to enter the fashion industry. Since then, they acquired a collection of private designer labels, including Paris Sunday, Ella Moon and The Fix. If you haven’t seen or heard of those brands, you will soon.

Looking at Amazon’s transparent playbook and past decisions, I think their next target is a fashion brand like Lululemon or Under Armour. Both are among the most profitable fitness brands in the fashion industry. Even a marginal decrease of these gym giants’ price points would potentially earn Amazon billions.

Other thoughts on potentials targets outside of fashion

1. Lowe’s

2. Ace Hardware

3.Target

The Future of the Model

Regardless of what industry or segment is next on Bezos’s target list, we’re pretty certain he’s operating on stage 3 of his plan (Find a Brand People Love). We’re also pretty certain we’re going to see some major acquisition moves from Amazon in the coming months and years.

My prediction? Amazon will make 3 major acquisitions this year on par with Whole Foods. Maybe not as expensive, but definitely on the level of brand cachet. See our Podcast, Cocktails and Questions (around the 6m 50sec mark) for more depth on what I mean.

With innovation and disruption at his core, Bezos is bound to continue transforming industries and institutions. He’s already started hinting at the direction in which he’s headed.

Ben Gaddis

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