The Devil Wear, Amazon?

In an already stressed retail environment, where the pandemic has made it kept consumers away from entering luxury retailers and 5^th Ave store fronts, has Amazon found its entry point into the luxury market via e-commerce with the launch of their “Amazon Luxury Store”? Can shopping on your phone be a luxury experience? It seems unlikely, but that’s not stopping Amazon’s latest attempt to get high-end brands onboard its platform.

Years ago when Amazon first entered the market, most luxury brands would not have been caught dead on the Amazon platform. For luxury retailers, brand association is the cornerstone for how their target market perceives their brand, however we've seen over the last few years Amazon has increasingly gained respect across a number of different audience segments. The Luxury Store is launching with just Oscar de la Renta, but other brands will likely be joining in the months to come. Actually, browsing the new Luxury Stores won’t be an option for just anyone, though. In line with the luxury ethos, Amazon is introducing some artificial scarcity. Only selected Amazon Prime members in the US will be invited to browse the digital racks, with Amazon presumably targeting affluent customers.

Luxury brands have had to get very creative with marketing tactics in the last few years, particularly luxury popups that have leverage various digital marketing platforms and social media to attract new audiences. By enlisting influencers, hyper targeted social media ads, and a variety of other tactics has allowed these brands to tap new audiences and grow their market share. Amazon and Google both know consumer behavior better than any platform out there and their stickiness with customers has only reached new highs during the pandemic (currently the largest seller of apparel in the US), so I believe it was just a matter of time when luxury brands were going to be faced with accepting Amazon’s offer to join forces.

Ultimately, what trade-offs will brands be are willing to make? Some, certainly, will be interested in courting Amazon’s 100 million Prime customers, especially at a time when the pandemic has stifled the foot traffic necessary to sustain many luxury shops. Additionally, brands will be able to maximize their return on digital marketing efforts by allowing unsold inventory to reach these Prime customers. Oscar de la Renta CEO Alex Bolen told Vogue it just made sense to reach customers where they were. With all of us stuck at home, it will be ultimately up us if we are willing to forego the white glove experience, and the thrill of running around New York City to track down that single piece of luxury item you’ve always wanted and allow ourselves to accept the fact that we are shopping at the same store we plan to purchase duct tape.