Amazon on Tuesday announced the long-rumored launch of a luxury fashion channel, Luxury Stores, available via the Amazon app, only to U.S. Prime members and only by invitation, according to a company press release.
The first storefront is from Oscar de la Renta, featuring pre-fall and fall/winter 2020 collections including ready-to-wear, handbags, jewelry, accessories, a new perfume and, soon, childrenswear. "More brands will launch within Luxury Stores in the coming weeks and seasons," Amazon said.
Through the "store within a store" setup, brands sell their collections directly and make their own inventory, selection and pricing decisions. Amazon offers merchandising tools "to create and personalize content," and the app employs an interactive "View in 360" feature that allows customers to more easily view the details of certain styles.
A luxury fashion play from Amazon has been rumored since the beginning of the year, before the COVID-19 pandemic preoccupied the world.
Months on, with supply and demand in all retail categories shaken by the ongoing disease outbreak, the e-commerce giant has moved at last. But its entry into this stratum of retail puts brands in a bind, according to Martin Ekechukwu, CEO of marketing and advertising agency WHTWRKS. On the one hand, Amazon Prime has the customers they want, and the tools to reach them; on the other hand, Amazon is destined to retrieve the information it gleans from the partnership for its own sales, Ekechukwu said.
"If you're a high fashion retailer and you're giving Amazon your best stuff — shame on you," Ekechukwu said by phone. "You should always keep your best stuff in house. That's why you're not going to find Gucci on Amazon, you're not going to find Louis Vuitton on Amazon. The high-end fashion data points — Amazon is going to sop it up with a biscuit."
The e-retailer could also be aiming to capture sales from customers who regularly buy everyday items like diapers or T-shirts, but are ready for a higher-end item, according to Ekechukwu
Top fashion labels may have little choice, however, according to Kristin Bentz, president of KB Advisory Group. Younger consumers in particular see Amazon as a means to an end, a way to pick up a coveted item and have it in two days, or even two hours. The pandemic's forced limitations and even closure of stores makes Amazon an even more important potential purchase channel, she said.
"You're going to have this democratization of apparel and people aren't going to care anymore," she said by phone. "Even if they do get a vaccine, unless you're doing appointment viewing, you're not going to get that rush that you get from being in the store."
Whether labels like Balenciaga or designers like Virgil Abloh agree to sell through Amazon remains to be seen, Bentz said. But the younger crowd is unlikely to be wooed by Oscar de la Renta, and Oscar de la Renta's customers aren't necessarily going to shop at Amazon, she said, noting that Walmart's tie-up with Lord & Taylor three years ago is an apt comparison.
"Amazon needs luxury — that's the missing piece of the puzzle for them because Walmart is on their game and they're coming for them," Bentz said. "That Oscar customer doesn't shop on Amazon. It's the pinnacle of luxury, so I see what they're trying to do. I find it interesting and kind of eyebrow-raising that they start with Oscar, but Oscar needs them more than Amazon does."
As Amazon notes, there will be more labels to come. And, with fashion shows also scrambled by the pandemic, expect Amazon to leverage its studio operations to produce one, Ekechukwu said, noting that Hermès has already shown how that can be done. "Amazon is trying to create some fashion credibility. You can almost bet they're starting the process."