Amazon Goes Luxe

‘Shopping for clothing is so different. It’s much more emotional, it’s much more personal and I think it really requires more guidance, more insight, and it needs to be more fun and engaging’. Cathy Beaudoin’s words could be printed in a fashion magazine, but her audience is comprised instead of the world’s top financial journalists and analysts. As president of Amazon’s clothing division she is heading up what could be a major revolution in the luxury retail industry. The question is ‘will consumers want their Burberry in the same basket as a toaster, jigsaw puzzle and latest erotic e-book?’ or, put another way, ‘will e-retailers succeed where supermarkets such as Walmart have failed?’.

Retailing clothing may not seem such a major departure for a company which has already moved into other industries – for instance taking on publishing in a way which is already having profound effects on consumer behaviours. Amazon has sold fashion goods for years but what’s changed is a recent drive to recruit high end brands (including Vivienne Westwood and Michael Kors) and this marks a significant shift for the company – away from their usual price-slashing business model.

High fashion brands leave little room for price negotiation, their elitism is part of the point. Leading designers are weighing up the advantages and disadvantages of reaching such a mass market and the reception, from some at least, has been decidedly frosty: ‘Amazon will never sell Louis Vuitton, because we are the only ones that sell it,’ explains Louis Vuitton CEO Yves Carvelle. ‘This is a model of direct control that we pioneered, and I think long term it is the direction that most luxury ecommerce will take’.

Luxury brands, however, face other difficulties, which an official Amazon presence could help dispel. Amazon acts as a middle man for third party suppliers, many of whom are already selling high end goods (including Hugo Boss and Ralph Lauren products) on the site.

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Amazon has been stepping up its fashion credentials. There’s prettier packaging for clothing, in-house fashion photography, teams of stylists for models – the company even sponsors New York’s Met Ball. The appeal of high end fashion is obvious – much better margins, with similar costs for the e-retailer. The question of the venture’s success however may come down to more than just economics.