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Amazon’s latest luxury promotion is slow to win big fashion brands



Oscar de la Renta fell sharply. This fall, the fashion house began selling black lace evening dresses for $2,000 in an unlikely place: Amazon.com Inc..

Amazon’s latest effort to attract luxury goods to its platform has been slow. Since creating a special area on its mobile app in September to accommodate high-end fashion, the e-commerce giant has accumulated a handful of major brands.

This is not the first time Amazon has tried to add designer products to its large and rapidly growing market. In the past, luxury brands such as Louis Vuitton and Gucci avoided Amazon because they did not adequately monitor unauthorized sellers and counterfeit products, or did not give brands more control over the products they sold And price.

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Amazon’s latest product is called a luxury store, which solves some of these problems. It is an invitation-only service for selected Amazon Prime members, who have 150 million subscribers worldwide. Designers can choose the products to be sold and can control pricing. There are no product reviews or links to third-party sellers. Projects are displayed in 360-degree views and dynamic graphics.

An Amazon spokesperson said that customers and partners have responded positively to luxury stores, adding that the brand has begun to replenish inventory and expand the range of options. She said that since the establishment of the luxury store, other fashion companies have contacted the company to express interest, but declined to reveal their names.

LVMH Moët Hennessy Louis Vuitton SE is a fashion company that is still dissatisfied, and the French luxury goods group also follows Dior, Bulgari and Givenchy. An LVMH executive said that the company rejected Amazon’s proposal to join the luxury store because the company has its own e-commerce business and does not want its brand to be associated with Amazon.

Luxury brands such as Louis Vuitton and Gucci have avoided Amazon in the past. (IStock)

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Large luxury brands are taking action to regain control of their e-commerce business, thereby reducing the retail inventory of third-party sellers such as Mr. Porter, Farfetch or department store websites instead of their own e-commerce platforms.

Before the luxury store went on sale, Oscar de la Renta sold perfume on Amazon. Chief Executive Alex Bolen said that online wholesale and direct-to-consumer sales accounted for about 5% of the business, which makes it dependent on luxury department stores such as Neiman Marcus and is affected by the coronavirus. Popular temporarily closed boutiques.

Boren said that Oscar de la Renta’s sales fell 85% in the second quarter. Federal records show that the family business was initiated by the federal government to help small employers with a Paycheck Protection Program (Paycheck Protection Program) that received $2 million to $5 million in loans in April to save 42 jobs.

Bollen said opening a store in a luxury store is a way to increase digital sales and introduce the brand to more customers. He said: “The ability to discover the Oscar de la Renta brand is one of the most important things in our partnership with Amazon.”

Amazon Luxury Stores is an invitation-only service for selected members of Amazon Prime.

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Although Amazon dominates the U.S. e-commerce market, its performance in fashion and apparel brands is uneven. The company sold Kate Spade handbags and Levi’s jeans, but the two-year partnership with Nike Inc. broke down at the end of 2019. The sportswear manufacturer was disappointed that Amazon did not eliminate counterfeit products and gave the brand more control over the listing. .

Amazon said it severely cracked down on counterfeit products, used its technology to block 2.5 million suspicious accounts, and prevented more than 6 billion suspicious bad items from appearing on its platform.

KeyBanc Capital Markets analyst Ed Yruma said that the initial brand of luxury stores was small and the service could only be accessed through the main Amazon app, which was a disadvantage. Yuluma said: “You don’t want to be adjacent to many unimportant brands.” “The meaning of luxury is not just to attract the most traffic, but how you can attract the highest quality traffic.”

In addition to Oscar de la Renta (Oscar de la Renta), the new luxury store also launched Joseph Altuzarra’s $1,500 handbag, Roland Mouret ready-to-wear and La Perla Lingerie. On October 15, it added Cléde Peau Beauté, a skin care brand under Shiseido Co., followed by Car Shoe, Prada SpA’s footwear brand, on October 22.

Roland Mouret said in a statement that as Amazon becomes “the next frontier in the future of luxury online,” the time is ripe to join the luxury store. The British brand also said that luxury stores provide it with opportunities to reach new American customers.

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Before the pandemic, the online luxury goods market was growing as more and more people shifted their consumption. Although many fashion companies have made slow progress in accepting e-commerce, they have not ignored it.

Brands such as Prada and Gucci sell to online shoppers through luxury markets operated by Farfetch Ltd. and Yoox Net-a-Porter SpA, which collect transaction commissions. Many designers can also be found in the “luxury pavilion” section of the Tmall website of the Chinese e-commerce giant Alibaba Group Holdings.

Farfetch CEO José Neves said that most fashion brands are already sold online through US retailers such as Neiman Marcus and Nordstrom. He said: “They really don’t need it, and they are trying to avoid additional contact.”

An Amazon spokesperson said that luxury stores provide consumers with more choices, and brands provide consumers with a new way to contact. Oscar de la Renta (Oscar de la Renta) principal Bolen (Bolen) said: “The relationship with Amazon is largely a relationship of testing and learning.”

-Matthew Dalton’s contribution to this article.


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