They said it couldn’t be done. They said mass-market eCommerce giant Amazon could never sell luxury.
But the slowly-but-steadily growing Amazon Luxury Stores, launched in the USA in 2020 and in Europe in June, proves that it can – and we think there are very good reasons for luxury brands to get on board.
What are Amazon Luxury Stores?
Amazon Luxury Stores is Amazon’s platform for luxury retailers, allowing big-bucks brands to attract Prime members and compete on a level playing field in the world’s biggest store.
Accessible through amazon.com/luxury, or by selecting ‘luxury stores’ from the search bar, it has a different look and feels from normal Amazon. It’s clean and uncluttered, having taken style cues from the websites of huge luxury brands like Chanel and Louis Vuitton.
Its launch in 2020 was timely, as it allowed luxury brands to compete online during the pandemic when physical stores could not open.
Even so, growth has been quite slow: proof that Amazon’s incredibly successful mass-market model is perceived as incompatible with the luxury industry.
But the model is different for Amazon Luxury Stores. There’s no buy box and very little competition: while regular Amazon was designed for buyers rather than sellers, here real efforts have been made to please brands. The platform acts more as a showcase for brands than regular Amazon, and for smaller designers, in particular, we think Amazon offers huge opportunities.
The Barriers to Luxury on Amazon
Amazon was traditionally the wrong place for designer fashion and beauty.
A survey carried out by e-Comas found that most brands perceive Amazon as a purely mass-market, everyday brand, without the premium customer experience or customer service required to sell luxury.
Presentation and service are major considerations for luxury brands, and on normal Amazon, the brand isn’t in control of either.
Even more importantly from the brands’ perspective, Amazon’s fight-for-the-buy box model is incompatible with the luxury market: it favors lower-priced goods, whereas price competitiveness matters much less to luxury shoppers.
Being undercut by unscrupulous third-party sellers, and the risk of competing with counterfeit goods were also major considerations for luxury brands: Amazon had to ensure they would be kept off the platform.
Finally, in-store shopping is still a major part of the luxury buying experience. Luxury brands’ websites do their best to replicate that special in-store feeling, for example by using augmented reality (AR) to allow customers to try-on products and letting shoppers choose complimentary samples.
How could Amazon replicate that?
Amazon Rises to the Challenge
Amazon Luxury Stores has done a pretty good job of designing a platform for luxury shoppers. It’s still definitely Amazon. You know you’re on Amazon. But it’s differentiated enough to work.
The homepage is set out editorially, making good use of featured images, with emphasis on new products and seasonal trends: clearly, a talented fashion editor is employed. There is also more of an emphasis on the brands – or the ‘designers’ – than normal Amazon.
Once you click on a product, the listing is a super-pared-back version of Amazon’s usual listings: there is no A+ content, and lots of products don’t even have the usual bullets, just a brief ‘about this item’, a description, and ‘about the designer’. There are no reviews, no customer Q&As, no ‘buy it with’ section, and no adverts.
The customer service aspect is obviously one that Amazon has had to meet. For a while, the customer service phone number was displayed on the homepage, but it’s a bit more hidden now: there’s an FAQ page linking to a ‘chat’ page, which gives the number and promises personalized styling advice and beauty tips.
Best of all, Amazon has introduced gating for luxury brands. This means no fighting for the buy box, or being undercut by other sellers: the registered luxury brand is the only one that can sell its products on Amazon.
5 Good Reasons to Join Amazon Luxury Stores
If you’re a luxury brand, you now have the chance to join the world’s biggest marketplace, selling and competing at your own level. Here are five reasons very good reasons why you should:
Number 1: Amazon is where your audience is. Prime had 142.5 million subscribers in 2020 – millions of people who shop regularly at Amazon, are used to the way it works and trusts the brand.
When Oscar de la Renta became the first brand to join Amazon Luxury Stores for its launch, CEO Alex Bolen said: “I would guess that somewhere near 100% of our existing customers are on Amazon… We want to be able to talk to [our customer] wherever she’s comfortable shopping.”
Number 2: Replenishment. Amazon Prime is ideal for repeat orders – for consumers who regularly buy a particular item of make-up, for example – when the initial ‘wow’ is not so important.
Number 3: Completing the shopper journey. Customers use Amazon, brand websites, and physical stores together. Their shopper journey might involve finding a product on the brand website, checking it out in-store, checking the price on Amazon, buying it in-store, then replenishing it on Amazon.
Number 4: Showcasing your brand. For lesser-known luxury brands, Amazon Luxury is a great opportunity to market products, particularly while it still has a small number of brands. Your product launch could easily be on the Amazon Luxury Stores homepage.
Number 5: Protecting your brand! Even if you’re not on Amazon, your products might be, sold by distributors and third parties. The easiest way to regain control on Amazon, to ensure your products are gated and your brand is protected, is to join Amazon.
Nazli Kayikci, an Amazon Luxury Stores expert at e-Comas, says: “We think it’s a no-brainer to join Amazon Luxury Stores. It gives luxury brands the chance to finally be where their customers are and have more control over their brand presence online. We’re ready to help any luxury brand that wants to grow their business globally through Amazon.”
Read loads more about Amazon Luxury Stores in e-Comas’s recent white paper: When luxury meets the mass market: Amazon’s quest to sell the premium experience
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