Interview Synopsis

Amazon – luxury fashion platform launch & long-term growth outlook

  • Public Equity
  • Consumer
  • North America

After making inroads into mid-market fashion, Amazon has set its sights on the luxury segment. A former divisional head from the company was interviewed by Third Bridge Forum on whether this could mean disruption, the challenges of Amazon’s approach, and the competitive landscape.

Can Amazon stitch luxury fashion into its e-commerce offering?

The specialist started the conversation with an overview of the key trends, among which the strength of the secondary market was notable. “The resale space is growing rapidly, it’s probably one of the bigger… or the faster growing markets within apparel. Luxury is trying to figure out how best to deal with that, especially given some of the macroeconomic headwinds that are pushing more consumers into secondary.”

Thinking about the concerns luxury brands would have partnering with Amazon, the former head mentioned brand dilution, which is hugely difficult to quantify. “Amazon’s biggest offering to luxury is the exact opposite of what most luxury brands want.” 

Nike, which has previously worked with Amazon, and is “by no means a luxury player” is a case in point: “Nike was never willing to give Amazon any of its more exclusive drops and ultimately pulled itself out of the equation. This is a pretty big, pretty global brand that, certainly, could use any opportunity to grow more and they even chose to jump off.” 

Another challenge is the fact that, if Amazon were to fulfil orders on the behalf of luxury brands, it would receive the customer data, which is an issue as “you want to know your customer”. However, on the flipside, “if you’re going to be doing any of the fulfilment yourself, it will put insane strains on your operations. You’ll likely end up prioritising Amazon orders, the orders for which you end up walking away with no data whatsoever.” 

To access all the human insights from Third Bridge Forum’s Amazon – Luxury Fashion Platform Launch & Long-term Growth Outlook Interview, click here to view the full transcript.

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