Specialist
Former Head at Amazon.com Inc
Agenda
- Overview of Amazon's (NASDAQ: AMZN) marketplace expansion into luxury fashion
- Potential disruption to competitive landscape, including the Farfetch (NYSE: FTCH) and Yoox Net-A Porter platforms
- Supply chain and logistics dynamics
- Near-to-long-term outlook
Questions
1.
What 2-3 key trends have you been following in the luxury fashion industry?
2.
What is your estimate on the TAM for luxury fashion and what could that number become in 2021?
3.
Could you elaborate on the experimentation with secondary markets in the luxury fashion segment and some respective growth context? You described it as one of the fastest-growing segments. How does its growth compare to growth in other pockets of the industry?
4.
What online penetration levels do you think the luxury fashion market can reach in 5-10 years’ time? What is it now and how do we think about it relative to mass or fast fashion?
5.
What key drivers should we track to inform us of the negative or positive inflection points for luxury fashion growth and penetration? It seems as if brands aren’t thinking about the top-line number. What metrics are they thinking about?
6.
What are your thoughts on Amazon’s foray into the luxury fashion category? What do you think are the merits and drawbacks of Amazon’s entry?
7.
You mentioned how Amazon made prior attempts, such as in 2018 when it launched a branded women’s clothing label, but it seems that those efforts didn’t develop into anything material or significant. What lessons might have been learned and how do we better understand if Amazon is doing anything differently this time, with its foray into luxury fashion?
8.
How should we think about Amazon’s potential investments to penetrate or capture the higher household income demographic?
9.
Amazon’s luxury fashion offering seems to be off to a slow start with under five luxury brands on the site. Would there be a preference to acquire The RealReal or Farfetch rather than build out on its own?
10.
What are your thoughts on Amazon’s Luxury Stores launch and the initial invitation-only nature of the platform? Why do you think it chose this route and do you think it was the right strategy?
11.
How might a luxury fashion label assess the risk of partnering with Amazon, given that luxury has a slight exclusivity? You suggested that some brands want to own more of their sales – partnerships wouldn’t help to own more of the sales process. What is the value that Amazon brings to these brands?
12.
Our expert in a previous discussion the beauty space said that niche or indie-beauty brands would typically forgo an Amazon partnership because it would also be forgoing crucial customer data. Do you think this also applies for any luxury fashion brands that might partner Amazon? How would they evaluate the potential risk or value as an offset to forgoing customer data?
13.
Do you think Amazon may potentially drive more volume for the luxury fashion brands? How do we think about it in the realm of the logistics stream you mentioned? Who will own the logistics – is the onus on Amazon or the brands or will it be case-by-case?
14.
What’s your understanding of Amazon’s competitive nature in entering the luxury fashion segment? Existing offerings include Farfetch, The RealReal and Net-a-Porter. Where does Amazon really fit within the broader landscape? What are Amazon’s differentiating factors compared with established players?
15.
You mentioned Mr Porter which is a white-glove experience. Do you think there’s a risk with Amazon trying to replicate that model but stripping out the white-glove experience that would be expected?
16.
How are you assessing the market share dynamics? Who does Amazon truly have a chance to compete with and take market share from? We haven’t talked about Mytheresa, MatchesFashion or SSENSE. Which player could be most at risk of losing market share to Amazon?
17.
Could you comment on Amazon’s ability to replicate other players’ approaches to the luxury fashion market, such as Alibaba’s strategy using boutiques and pavilions?
18.
You’ve highlighted the importance of the vendors and how it will be a vendor-driven type of market where they will have very loud voices. Using Louis Vuitton as an example, what might prevent Louis Vuitton from selling via Amazon and can this be reversed?
19.
What do you think are the key hurdles for Amazon when it comes to figuring out the luxury fashion business? What inning are we in and what needs to happen for Amazon to successfully execute here?
20.
You indicated that Amazon is focused on capturing the higher household income demographic. How else could it achieve this? Is luxury fashion and apparel ultimately the only way to break into capturing that demographic? What else could be attempted?
21.
China has been quoted as a significant growth opportunity for the luxury fashion industry. What might be the key challenges for Amazon if it plans to re-tap the Chinese market and expand its platform there?
22.
What are your thoughts on Amazon’s luxury business’s leadership team? Another former Vogue editor has joined Amazon Fashion in recent press. What are the implications of Amazon’s hires from a well-regarded editorial company in luxury fashion? Does that tell you anything?
23.
Do you have any closing remarks about Amazon and the luxury segment?
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