AI Shopping
and Amazon Haul's launch & Capri/Tapestry
Clockwise from Top.
“Regulatory Hurdles”
As we noted here, the two biggest American luxury fashion conglomerates had agreed to a merger that would see Michael Kors, Coach, Versace, Jimmy Choo, Stuart Weitzman and others all under one roof. This all happened way back in 2023, and they officially called things off last month after the FTC sued to block the combination:
“With the termination of the merger agreement, we are now focusing on the future of Capri and our three iconic luxury houses,” Capri CEO John Idol said in a statement. “Looking ahead, I remain confident in Capri’s long-term growth potential for numerous reasons.”
The $8.5 billion acquisition, originally announced in August 2023, would have married America’s two largest luxury houses and put six fashion brands under one company: Tapestry’s Coach, Kate Spade and Stuart Weitzman with Capri’s Versace, Jimmy Choo and Michael Kors.
Lina Khan, the legal scholar heading the FTC, has been an advocate of using the federal government to curb monopolistic behavior. The theory behind blocking the Capri-Tapestry merger was that it would cause prices to rise in the “accessible luxury” handbag category: the new entity would have the ability to raise retail prices across Coach and Michael Kors.
With the merger officially off, Capri and Tapestry will be forced to fend off European competitors without the benefit and cost savings of a combined supply chain. A further question is what the recent election results means for M&A activity like this: it’s possible this combination would have been approved if Capri and Tapestry waited until January to sign their merger agreement.
Amazon Haul
In its quest to fend off low-cost rivals like Shein and Temu, Amazon is introducing a new concept called “Haul.” Those Chinese-based e-commerce platforms connect American consumers directly with factories in East Asia, with ridiculously low pricing. Amazon wants a piece of that business, and Haul is getting very high placement within the Amazon app, sitting just after “Holiday Deals” and “Groceries” and before “Medical Care.”
I am very curious to know how this is doing so far. While it’s only in its “beta” phase, there doesn’t seem to be much inventory or competitive pricing. A search for “red sunglasses” in Haul returned 6 results, with pricing around ~$5/unit. The same search in Shein yielded 29 pages of results (!) with pricing around $2/unit. Temu was similar, though pricing was a little higher.
Similarly, Shein’s SuperDeals section is much more put together and has a clear POV:
Compare the above to Haul, which merchandises a bead bracelet, white ribbon, and iPhone case and duffel bag at the top of the “Crazy Low” section.
It’s early days still for Haul, but at the moment it feels like this was rushed out the door so that it was live for holidays, but it doesn’t feel like a true competitor yet to Shein or Temu.
AI Shopping
The current crop of artificial intelligence start ups (think OpenAI, Anthropic) are looking to their smart assistants (think ChatGPT, Claude) to help cover the enormous costs of building the large language models that underpin the technology. While charging users say, a $20/month subscription is one way to defray costs, some AI assistants are starting to make specific, shoppable product recommendations that users can use to quickly make a purchase. If it takes off, it could rival the Google ad system that monetizes the search engine results and built the economic that is the Google of today.
Perplexity Shopping is one example of this, and we spent some time playing around with the tool and its outputs. The “pro” version, launched with much fanfare a few weeks ago, integrates your credit card info allowing you to purchase without leaving the Perplexity AI app.
However, in playing around with the tool, it leaves a lot to be desired. For example, in looking for a knit dress for Raquel for our upcoming holiday dinner, these were the product recommendations:
It recommended literal knitting kits! After some prodding, it recommended options from Naadam, Allsaints, and a few others. For comparison sake, I asked the same question to ChatGPT and Claude:
Claude couldn’t even get me an answer, due to an “Invalid UUID”?:
ChatGPT definitely aligns more closely with what Raquel in mind (though it didn’t flag her number one choice). For now, at least within the domain of product recommendations, AI has not yet caught up to Google, the Strategist or even your friendly store team, all of whom win out over the buzzy start ups.
Links.
Gap launches Zac Posen’s GapStudio.
Matthieu Blazy is officially in charge of Chanel.
Austin Butler to star in Luca Guadagnino’s American Psycho remake.
Invisible Ink gaining in popularity.
Betches links up with the NFL.
The drink Raquel keeps asking for this holiday season.
Why martinis keep getting dirtier.
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From Team TT
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