Amazon's Luxurious Ambitions
Amazon has built it's brand by offering a tremendous volume of products at very low prices, which has contributed to the demise of certain bricks and mortar retailers. But in typical Amazon fashion, they're not stopping there.
There are multiple reports coming out of the U.S. that Amazon is set to launch it's own Luxury Fashion site in the U.S. as early as later this month. The luxury goods industry is famous for its notoriously high margins, so it's no wonder Amazon wants a slice of the pie.
Given Amazons reach and influence, it's my guess that this new channel will leave most luxury brands preferring to sign up to Amazon's new site rather than try their luck alone. Although this will create a new sales channel for luxury brands, they'll undoubtedly be kept in the dark with any information about the customer.
Amazon keeps customer data from brands and third-party sellers because it limits their opportunities for repeat sales or marketing with the customer. This could be a big drawback for some brands, especially when repeat sales are a crucial part of their business model.
Should Amazon's new platform materialise, it's likely to provide a boost to the company's profit margins. But the question begs, is the consumer actually interested in such an offering? I mean, buying an $8,000 handbag online is a lot different from buying an $8 charging cable for your iPhone. There's also the matter of exploration, discovery, and service that is synonymous with physically shopping for luxury goods that Amazon will need to find an answer to.
Rest assured, I'll be keeping a close eye on how this one unfolds.