Amazon pivots towards high-end fashion with the launch of Luxury Stores

Digital
-

Amazon has launched its new Luxury Stores fashion site, which features clothes by top designers such as Elie Saab and Altuzarra. The retail giant first launched the US version of Luxury Stores in 2020. Now, the world’s largest online retailer has also launched the division in the UK, France, Germany, Italy and Spain.

Generally speaking, Amazon’s latest project got off to an underwhelming start, and many of the so-called ‘luxury’ items sold were of incredibly low value. But, in the last six months, the tide has turned. Now, Norwegian fashion designer Peter Dundas has described his embellished evening gowns as “flying”. In fact, one particular customer even bought four at once.

When selling through Luxury Stores, fashion brands are expected to offer free delivery and returns to customers. They’re given the choice to distribute through their own warehouse or Amazon’s.

What does Luxury Stores mean for the future of e-commerce?

Even though Luxury Stores is still a relatively new concept (even in the US), Amazon’s approach is providing high-end fashion designers with a new revenue stream. No longer just a place where household items are sold, Amazon’s Luxury Stores concept has helped make convenience the new luxury.

Due to this, several designers selling on Luxury Stores have already seen several benefits to selling on the platform. Now, Akiko Takashima, the chief marketing officer at Dundas, foresees Amazon being a substantial part of the company’s revenue going forwards.

That said, other fashion experts are not wholly convinced by the project. For example, Mary Portas believes that Amazon cannot be a big player in the market while they do not have top brands such as Burberry and Gucci, which currently appear on Net-a-Porter.

She added that established digital players such as Net-a-Porter, Matches and Mytheresa are also getting more sophisticated in their offerings. While these sites are focusing on the curation and the beauty, Amazon are purely focusing on convenience.

Amazon and high-end fashion – the view from Spike

Amazon’s pivot towards high-end fashion is incredibly interesting. Once known for household products, Amazon’s aim is to now combine luxury with convenience. If successful, this will allow the e-commerce giant to capture new demographics and customers.

While Mary Portas is correct that other online retailers currently have a stronger offering than Amazon’s Luxury Stores, Amazon has access to a near-endless pot of money that it can use to improve its offering. Plus, as other luxury brands see the success of Dundas and others, many will likely also make the switch and decide to sell on Amazon, too.

Added to this, Amazon retains another key advantage over its competitors: data. Particularly in terms of search marketing, Amazon has more than enough logistics and insight to ensure that their offering dominates the rankings. Offering convenience, money and accessibility, it will be interesting to see how retailers such as Net-a-Porter respond to such a challenge.