Amazon hasn’t been shy about its ambitions in fashion. Since 2012, the company has sponsored Met Galas, fashion weeks and Vogue Fashion Funds, built a photo studio in Brooklyn, hired a former Vogue editor to lead fashion editorials, launched seven in-house fashion labels and recruited brands like Michael Kors, Calvin Klein, Coach and Theory to sell products on its platforms. It’s been fairly aggressive.
Some luxury designers have shied away from associating their name with the same ubiquitous marketplace associated with the fast delivery of diapers and toilet paper. Most recently, LVMH CEO Jean-Jacques Guiony made it clear during a call with investors on Wednesday that Amazon would not be part of the luxury portfolios’ digital strategy for its brands, which include Louis Vuitton, Givenchy, Céline and Dior, saying there was “no way” the company would do business with Amazon in its current state.
For smaller designers and mid-priced luxury fashion retailers, however, Amazon provides tempting reach and exposure, especially to its 54 million Prime customers.
“Amazon is a behemoth,” said Jerad Hulse, a representative for Nicole Miller, who sells her dresses, handbags and accessories through the retailer. “Their foray into fashion has exploded over the past few years as they pushed their offering towards a more fashion-focused customer. You can’t say to no to a retailer whose distribution is second to none.”
Hulse added that Amazon is “reliable, trusted and fast” when it comes to selling to its customers, and that the increased online presence has had a trickle-down effect to the Nicole Miller e-commerce site as Amazon customers look to explore the brand further on its own.
Other brands like Michael Kors, Kate Spade and Calvin Klein have embraced Amazon, but only at arm’s length, choosing to sell only certain items on the platform. Michael Kors, for instance, sells watches and jewelry through Amazon, primarily. Calvin Klein’s biggest market on Amazon is its lingerie, but some items, like denim, appear there as well.
A recent listing for a pair of Calvin Klein jeans demonstrates the lack of control that a brand has over its prices once it sells through Amazon: The same pair sells for between $27 and $89 on Amazon, depending on what size you choose.
“The problem is price discipline and neighbors,” said Luca Solca, managing director of global luxury goods at Exane BNP Paribas. “Luxury retail is all about maintaining prices and selling side by side to peers. Amazon, by contrast, is keen to beat competitors on price and does not have a ‘high end’ dedicated space.”
Small, independent designers are also holding out on selling through Amazon for now, but are watching closely to see what the platform becomes. A representative for Thakoon Panichgul, the designer who just opened his first standalone store for his brand Thakoon, said that he was focusing on his own distribution models, for now.
“How Amazon is approaching fashion is remarkable,” said one independent designer who didn’t want to be named. “As a designer interested in uniting fashion and technology to meet the needs of consumers, it will be interesting to see where Amazon fits.”
LVMH’s recent comments demonstrated that despite Amazon’s efforts, mood among the top luxury brands hasn’t changed much since Amazon built Amazon Fashion in 2012. Then, former Louis Vuitton chief executive Yves Carcelle said “Amazon will never sell Louis Vuitton, because we are the ones who sell it.” Alexander McQueen CEO Jonathan Akeroyd said at the time that while it wouldn’t rule out selling on Amazon, the importance of maintaining control of brand identity online was always increasing. Alexander McQueen products aren’t sold on Amazon today.
“Top luxury brands — like ones of the LVMH group — have the benefit of an audience that doesn’t necessarily want to buy a luxury handbag in the same transaction as their laundry detergent,” said Tamar Koifman, head of sales and marketing at the Digital Luxury Group. “But Amazon is gaining more and more market share in overall online sales and for brands that rely on retailers and promotions to drive their business, Amazon is hard, and will get even harder, to ignore.”
