Amazon Prepares to Enter the Sports Apparel Space; Microsoft and Amazon Teaming Up Again
by Hugh Williams on 19th Oct 2017 in News

RetailTechNews’ weekly Amazon Watch brings you some of the company’s biggest moves from the past seven days, analysing how the giant is revolutionising the retail space. In this week’s edition: Amazon prepares to enter the sports apparel space; Microsoft and Amazon teaming up again; Leveraging Whole Foods deal to take on meal kit providers; and Alexa can (finally) tell voices apart.
Amazon prepares to enter the sports apparel space
Amazon is making a foray into the sportswear market, beginning work with Eclat Textile Co., which has experience making high-performance sportswear for Nike, Lululemon, and Under Armour, to produce a private-label brand.
The move is to take advantage of consumer searches for sports items which don’t return a large selection from established brands. In this instance, Amazon wants to be able to push its own offerings. But should this worry leaders in the sports apparel market, such as Nike, Lululemon and Under Armour?
Yes and no. With a lot of competition and discounted products online, premium brands will find it even harder to differentiate. Nike has already said it expects sales to decline this quarter, while Under Armour has cut its annual sales forecast for August. With consumers turning to voice search for shopping, Amazon’s Alexa will surely return its private label products for the majority of sports clothing searches too, meaning established players in this space could find it hard to appear top of searches in their category.
However, one of the reasons consumers use Amazon is because of its selection of some of the biggest brands in the world. The Seattle-based company won’t risk disappointing its user-base (and hurting its bottom line) by slashing such big names.
Microsoft and Amazon teaming up again
Microsoft and Amazon are teaming up on deep learning. The two goliaths recently announced a new open-source deep learning interface called Gluon, aiming to make AI more accessible to a greater number of developers.
Deep learning in the retail space is something which will become par for the course over the next few years. It uses span-optimising supply chains, using data to increase conversions and personalising shoppers’ experiences through predictive modelling.
From a consumer perspective, the launch of Gluon will mean a more customised shopping experience, on a greater number of platforms, as deep-learning algorithms begin to become more accessible to the masses.
This isn’t a move which should necessarily worry retailers, and will in fact help those who are struggling to integrate deep learning into their processes, to use AI to improve shopper experience. However, it does allow Amazon to have its fingers in even more pies when it comes to retail technology, giving them an even clearer picture of what the customer is doing.
Leveraging Whole Foods deal to take on meal kit providers
AmazonFresh is now a part of eMeals’ lineup. eMeals makes online grocery shopping easier, by suggesting recipes for families, for which it partners with a number of grocery delivery services. This partnership will see AmazonFresh listed as a supplier of the ingredients for these recipes.
Meal kit sales now form a USD$5bn (£3.79bn) industry, with busy consumers keen to have ingredients delivered to their doorstep, rather than spend time trawling through supermarket shelves. Introducing a partner the size of Amazon into the market can only help, with their resources offering a wider range of delivery options. Given Amazon’s acquisition of Whole Foods last year, it is no surprise to see a move like this, as it taps into consumer desire to complete more of their transactions online.
As with most of Amazon’s moves in the retail space, it will be good for consumers (delivery options and choice of food will increase, and competition could lower price), but bad for business. Businesses already in the meal kit space (such as Blue Apron and HelloFresh), who have already suffered from Amazon’s acquisition of Whole Foods, won’t be able to match the reach or range of products offered by Amazon. This is likely just Amazon’s first play in this space. There will be more to follow.
Alexa can (finally) tell voices apart
Your relationship with Alexa is about to get even more personal, with the voice assistant now able to tell voices apart. This means users in a family home will be offered customised experiences (such as music and shopping lists).
This is a development which will significantly bolster the reputation of Alexa in multi-person homes. Google Home announced the functionality for up to six voices, meaning Amazon has been playing catch up since then. The functionality will be rolled out across its Echo smart speaker, as well as any other devices with Alexa built in.
It’s another step towards the whole family becoming familiarised with voice shopping, and is sure to be a blow in the long run to brick-and-mortar retailers. The rise of voice search to the whole family also poses the interesting question to advertisers of how to monetise this opportunity (if indeed it is an opportunity). Amazon is unlikely to fill its voice-search results with ads. With traditional search, if the top three results are ads, consumers can skip over these in less than a second. With voice search, users will not be so willing to listen through three ads to get to the result they wanted. Advertisers are going to have to optimise for voice search.
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