Amazon: A Bad ‘Hood For Luxury Brands?

The Wall Street Journal: “Amazon is courting companies across the retail spectrum, but one sector is still mostly holding out: the world’s club of luxury brands. Swatch and others in the luxury industry say Amazon’s online marketplace undermines the strict control they say is key to maintaining a sense of exclusivity—and keeping prices high. While some makers of luxury products have decided to join Amazon, many of the industry’s biggest players—including Swatch, Gucci owner Kering, luxury-watch maker Cie. Financière Richemont SA and LVMH Moët Hennessy Louis Vuitton SE —are staying away for now.”

“The absence of high-end products has hampered Amazon’s push to be a force in the fashion industry, despite years of working to expand the merchandise it sells officially though its website. Adding luxury goods would help Amazon boost margins and build loyalty among customers of Amazon Prime, its premium service favored by higher-income shoppers that offers faster delivery and other perks, according to former executives familiar with the company’s shopper base.”

“One of the biggest worries for these luxury companies: The difficulty of segregating their product listings from the rest of the goods sold through the site. That means a $5,000 suit from luxury Italian menswear company Brioni, a subsidiary of Kering, can appear next to a $200 suit from Kenneth Cole.” Jean Cailliau, executive adviser at Paris-based investment bank Bryan, Garnier & Co., comments: “That contradicts the essence of luxury selling and shopping, where the product is the product also because of its environment.”

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Your Thoughts?