Amazon’s entry into the incredibly hot flash sales market with MyHabit was late and seems undewhelming. Amazon’s main problem is that its key competitive advantage, namely price-cutting, won’t work here, because it will only alienate the brands that Amazon needs to succeed.
But Amazon has an ace up its sleeve that it can use to compete in this tricky market: Zappos.
Amazon owns Zappos, but Zappos runs independently under its visionary Founder and CEO Tony Hsieh.
Here’s why MyHabit should be run under Zappos and not Amazon:
- Zappos is already in the fashion business and excels at it. Think Zappos is still only about shoes? Ha! Just like Amazon sells everything under the sun and not just books, Zappos sells all kinds of clothing. It’s a hard business: anticipating trends and securing the right kind and right amount of inventory is very hard. It’s because Amazon couldn’t do it that they had to cave in and buy Zappos. It’s one of those “DNA” things. Private flash sales is a more natural extension for Zappos than for Amazon, which is about price and volume.
- Zappos can differentiate itself much more easily. In a market dominated by the likes of Gilt and with Vente Privée about to charge in, a new entrant, even one with Amazon’s heft, needs to be able to differentiate itself. Again, Amazon’s main differentiator won’t work here. But Zappos does have a great differentiator which is much more likely to work, namely its great brand and customer service. Private flash sales are about curation and brand building. Gilt does photoshoots to highlight the clothes it sells and invests a ton into content. This is the kind of stuff Zappos would do much better than Amazon. Zappos brings more to the table with its brand and customer service focus than Amazon does.
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