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Amazon offers luxury brands a new route to market

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Amazon said today that it was moving into the luxury category, with selected shoppers to receive invitation-only access to brands including Oscar de la Renta via their mobile devices.

The retail giant, ranked Elite in RXUK Top500 research, says that its new Luxury Stores department offers customers new ways of exploring products from luxury brands, combined with convenient ways of taking possession of goods once bought. 

Amazon says the launch comes into response to customer demand. “We are always listening to and learning from our customers, and we are inspired by feedback from Prime members who want the ability to shop their favourite luxury brands in Amazon’s store,” said Christine Beauchamp, president of Amazon Fashion. “We are excited to offer luxury brands the services and technology to build an inspiring, elevated customer experience. It’s still Day One and we look forward to growing Luxury Stores, innovating on behalf of our customers, and opening a new door for designers all over the world to access existing and new luxury customers.”

Shoppers – initially drawn from members of Amazon’s US Prime subscription scheme – who are invited to Amazon’s Luxury Stores via the Amazon app, will initially be able to inspect closely Oscar de la Renta clothing, handbags, jewellery and accessories via merchandising technologies such as View in 360. Goods are sold directly by the brands in a ‘store within a store’ experience, and brands make their own decisions about the clothes they stock, and how they are priced. Amazon provides the merchandising tools, enabling immersive storytelling and including autoplay imagery and in-motion graphics. Oscar de la Renta and Amazon, for example, collaborated on a launch video that starred Cara Delevingne and was directed by Bunny Kinney.

Alex Bolen, chief executive of Oscar de la Renta, said: “As a global leader in retail, Amazon has a relentless focus on improving the customer experience through constant innovation, utilising technology and customer feedback. We admire Amazon’s customer-centric focus and look forward to telling our brand’s story in compelling and engaging ways to even more customers through the Luxury Stores experience.”

Other brands are set to join Amazon Luxury Stores in due course.

Our view: At first glance this seems a real strategic shift from Amazon, whose business was, after all, built on offering goods cheaper and via convenient delivery. But the move is distinct because it does not set Amazon up in competition to luxury brands – rather it offers those brands a new direct route to sell online via Amazon in a way that is comparable to Tmall’s luxury stores, used by a wide range of brands to sell online in China. The control remains firmly with the brand. 

That’s important because luxury brands used to avoid marketplace. They feared cannibalising their own sales, and preferred to curate their own collections via their own exclusive websites, or those of trusted partners. But then, when it came to China they decided they needed to sell via the marketplace model if they were to reach customers in that country at all. Now that Amazon – and marketplaces more generally – have a large share of retail traffic, this may be the time to capitalise on its domination of the market. For this to work for both Amazon and the brands that use the website, the Luxury Stores experience will need to stand apart from the way Amazon sells elsewhere. While Amazon makes it easy for shoppers to find products, it is not necessarily known for the presentation of those products, once found, although technologies such as augmented reality (pictured) have started to change that. This is its chance to take that change further.

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