Amazon’s New “Luxury Stores” Signals Shift In Brands’ Relationship With The Online Retail Giant


Today Amazon
AMZN
launched  its Luxury Stores experience, with Oscar De La Renta as the first brand to open a storefront. 

While the ability to shop the store is invite-only, here’s what we know so far, and how some features from the platform could win over apparel brands and spark a whole new online fashion revolution. 

It shows that luxury brands are becoming more accepting of Amazon

Alex Bolen, CEO of Oscar De la Renta, says that getting more mindshare with existing customers, as well as gaining new customers is the name of the game. “We want to be able to talk to her wherever she’s comfortable shopping,” he told Vogue in a report today. 

Many luxury brands have rebuffed Amazon in the past because they want to have more control over the customer experience, But Bolen  points out that avoiding Amazon based on ideological grounds could be a mistake. “This idea that you don’t want to speak to a customer where she’s spending a lot of her time is a mistake.”

Luxury Brands have more control over the experience than might be expected

For brands that sell to Amazon on a wholesale basis (also known as first-party vendors) often face issues around product availability and product pricing, since Amazon is making assortment and pricing decisions – often algorithmically. 

Luxury Stores appear to be run on the marketplace (also known as third-party merchant) model, whereby the brand can independently make decisions regarding their assortment, pricing, and fulfillment. “Fundamentally our relationship with Amazon is not a wholesale arrangement,” Bolen told Vogue. 

This means that a brand could even utilize Fulfillment By Amazon (FBA), making the product Prime-eligible, in theory. 

It features an Augmented Reality try-on experience 

Vogue, which got a preview of the shop’s features, says that Amazon’s most impressive innovation is its View in 360 tool, “an interactive 360-degree view feature that allows customers to visualize how select garments will look on various body types and skin tones, With multiple models for each dress size.” 

Of nearly any online retailer, Amazon is probably best-positioned to solve fashion’s lingering fitment issues. Oscar De Lar Renta’s Bolen says that online return rates can be almost 30%, compared to ‘low single digits on a bad day’. If Amazon can solve this problem for through an AI tool, the retailer will have apparel brands lining up around the block.  

It’s invite-only

Not all Amazon shoppers or even Prime members can shop the experience. 

“Luxury Stores is currently offered in the U.S. by invitation only to eligible Prime members,” Amazon’s landing page says. Users can request an invitation to be added to the waitlist.

It’s akin to lining up behind a velvet rope, making the whole experience feel more exclusive. Amazon also has not announced future brand partners, leaving shoppers in suspense – in a good way. 

It makes an immersive online experience accessible to brands

Christine Beauchamp, President of Amazon Fashion says that when their customers are shopping for luxury, they’d like it to be an immersive, inspiring experience. “Increasingly they’re looking to understand not only the product itself but the story of the brand, the craftsmanship, the make,” she told Vogue. Creating a flawless, immersive experience is a tough challenge for any brand. Perhaps Amazon can create a shortcut for luxury brands, as well as allowing them to access many millions more shoppers who are also fiercely loyal to the Amazon brand.



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