It was only a matter of time.

I’ve written before how Amazon has been trying to push into the luxury sector for the better part of a decade. They dipped their toe in with Common Threads – a partnership with Vogue that brings awareness to brands impacted by COVID-19.

But a true push into luxury had not been realized until this week.  On Wednesday, Oscar de la Renta became the first luxury label to open an Amazon storefront.

This is, of course, HUGE news.  Experts were torn on whether or not consumers could ever think of the giant retailer as anything more than a place for fast necessities.  Could it be possible that we’d buy toilet paper and $3000 designer handbags in the same transaction?  With Prime delivery to boot?  Now Amazon has their chance to show us.

The Fine Print

It won’t quite be a situation of toilet paper and Gucci handbags in one click.  Luxury Stores, as Amazon is dubbing it, is an invitation only platform.  You must be a Prime member.  Beyond that, the criteria for being accepted is unknown (I’m currently on the waitlist).

When you do make a purchase, it will be a separate transaction from regular Amazon purchases.  Items are guaranteed authentic and can be returned within 30 days.  And yes, there’s free shipping.

The inventory and designers on the platform is constantly evolving.  I believe Amazon said it needed at least 12 luxury labels on board for this to be viable.  Stay tuned for which labels are next.

Why is this Appealing to Luxury Brands?

As with any business relationship, there’s always the question of what’s in it for me?  Amazon’s consumer data points are unparalleled.  They know how, when and what you’re going to shop for… even before you know it.  e-Commerce has long been a sore spot for luxury fashion.  The industry was painfully slow to adopt it, and their rollout of it is still a work in progress.  Not all luxury items are listed, inventory is different in store versus online and shipping can take a ridiculously long time considering the price points.

Amazon is a well-oiled machine that worked out all these kinks over a decade ago.  The are the industry leader.  Why reinvent the wheel or take on the burden yourself when you have an expert in the field trying to court you to use their platform?

What about other multi-brand retailers?

You may be wondering why brands like Oscar de la Renta wouldn’t go to Farfetch or Matches Fashion first (Oscar is already on both platforms).

Again, I think it goes back to consumer data.  Farfetch does operate as a platform, like Amazon’s new venture, allowing brands to dictate their own inventory.  But here’s the key difference.  On a platform like Farfetch, individual boutiques that sell luxury labels are dictating the inventory.  On Amazon’s Luxury Stores, the brand itself is in full control of their inventory, branding and message.

Interestingly, Farfetch is doubling down on their marketing strategy aiming to use brand recognition as the competitive advantage for driving sales.  While they have been mildly successful, their growth can’t compete with Amazon’s.  Further, consumers have a hard time understanding what they’re known for because they carry SO MANY brands.  Have you ever tried to search for something on Farfetch?  The possibilities are endless.  A new website, logo and brand identify are to be launched this year. Will they succeed in becoming a household name in luxury?  Amazon will surely be giving them a run for their money.