Logo Bizon
Guillaume Rigallaud, Bizon CEO and Amazon Expert

Guillaume Rigallaud

Mar 17, 2021

Troupeau Bizon

Luxury on Amazon: our opinion

"Personally, I would never go and buy something on Amazon that could represent my individuality, as is the case with a luxury product (...) I think luxury consumers are looking for a real experience when they buy one of these products."

Ian Rogers, LVMH's head of digital on BFM, french TV, October 2017.

Ian Rogers' speech is the consensus in the luxury sector. Like him, decision makers at luxury brands are struggling to get on board with e-commerce and, more broadly, Amazon. Luxury online sales account for only 8% of the world's total e-commerce revenue, according to the renowned Boston Consulting Group. That's very little. The reason: an irrational and paradoxical fear of counterfeiting, of losing their brand image and of being less profitable.

The two worlds seem irreconcilable: Amazon is often seen as a place where imitation products are sold freely and simply as not premium enough. On the other hand, the luxury world snubs online sales and consequently Jeff Bezos' Marketplaces.

All this to end up where? To a general delay of the industry on online sales and a gigantic loss of earnings for everyone. What if it was time to break down the barriers? What if it was time... to get on board with Amazon?

Why Amazon is (as of today) suitable for luxury.

The situation on the Marketplaces is not as bad as commonly implied and used as an excuse for luxury brands to stay behind.

Amazon's tools allow brands to remove counterfeit products either manually or proactively. We describe these very powerful tools in more detail in a dedicated article. In short, being the owner of the rights to a brand allows it to be registered in the Brand Registry, which in turn allows access to Amazon's programs.

The first excuse of luxury brands is therefore not very relevant: if their products are counterfeited on Amazon, it is also because they do not take advantage of the tools made available by the platform. Some of them do not even require active monitoring on their part: luxury brands have their share of responsibility in the story.

Another point: we hear that Amazon would "purposely" leave counterfeit products on the marketplace. Here again, the reasoning is problematic. It is not in Amazon's interest to let its sellers sell counterfeit products, simply to improve the brand image that Amazon has spent years developing. To give the image of a market without rules is to lose the consumer.

More generally, the issue of counterfeiting also raises the question of the violation of intellectual property and trademark rights. In Germany, Coty accused Amazon of infringing its rights by selling products in Europe that the brand had not yet launched on that market. After months of deliberation, the German Federal Court of Justice ruled... concluding that Amazon did not infringe Coty's rights.

Another point: we hear that Amazon would "purposely" leave counterfeit products on the marketplace. Here again, the reasoning is problematic. It is not in Amazon's interest to let its sellers sell counterfeit products, simply to improve the brand image that Amazon has spent years developing. To give the image of a market without rules is to lose the consumer.

More generally, the issue of counterfeiting also raises the question of the violation of intellectual property and trademark rights. In Germany, Coty accused Amazon of infringing its rights by selling products in Europe that the brand had not yet launched on that market. After months of deliberation, the German Federal Court of Justice ruled... concluding that Amazon did not infringe Coty's rights.

Then, what is the solution?

It's simple. Being present on Amazon also means keeping control over your prices and your brand image as a recognized and reputable seller. Amazon provides a wide range of tools for brands to develop their content and image. For Coty, it would have been easier to be present on Amazon and control its image than to go to court, only to lose the case after months of waiting.

The product sheets are more and more qualitative on Amazon, as well as the brand stores and the advertising solutions of the marketplace. Everything is already there!

CineReplica's product sheet, a client of us. Number 1 of its category.

It is up to the brands to use these tools to make their world shine. Before talking about product counterfeiting and brand image degradation, it is important to do everything possible on the platform to improve its image.

For its part, Amazon is investing heavily in the fight against counterfeiting. We know that since the beginning, the firm has injected 400 million dollars into the Project Zero program (https://siecledigital.fr/2019/03/01/projet-zero-un-programme-initie-par-amazon-pour-reperer-la-contrefacon/), which scans the millions of products available on the marketplace every day to detect counterfeit products.

When we read that Amazon would be negative for the image of luxury brands, we answer that on the contrary, being on Amazon is an additional connection with their consumers. A study by the Boston Consulting Group already showed in 2016 that customers of luxury brands expect an omnichannel experience... and we'll let you guess who is leading in online sales.

The relationship between Amazon and luxury brands already exists (and is accelerating).

The first to get started will be the winning the market.

Contrary to what some houses seem to think, luxury is already installed in the Amazon** universe. We have seen Tom Ford and Save x Fenty (brand owned by the very famous Rihanna) unveil their respective collections through shows broadcasted live and exclusively on Prime Video. Similarly, Burberry's Spring/Summer 2021 collection was unveiled in early September... live on Twitch, a streaming platform owned by Amazon. A partnership between Vogue and Amazon Fashion had also been unveiled to help designers who are in a precarious situation due to the COVID-19 crisis.

Are we heading towards a marketing of luxury products on Amazon? The answer is yes. Long before all these partnerships, Amazon was quietly initiating its launch in luxury by launching in late 2019 VRSNL (for "Versional"), a luxury ready-to-wear e-shop. The site now presents pieces signed by about thirty houses, including Gucci, Prada, Bottega Veneta or Dolce & Gabanna. In other words, very big names.

On the luxury boutiques side, we can observe a deep inspiration in Amazon's sales methods. As Forbes titles it, "customer intimacy" is now inviting itself into luxury. Personalize their offer, maintain a privileged relationship with their customers, innovate... Amazon is shuffling the cards of e-commerce. It's only a matter of time before luxury invests in Amazon.

One year after the launch of VRSNL, Amazon is integrating Luxury Stores into its mobile application, accessible by invitation and allowing major brands to access enriched and independent stores to offer consumers a premium experience. The first brand to launch was Oscar de la Renta, which featured the coveted Cara Delevingne in its launch spot.

Picture : Amazon / Oscar de la Renta / Vogue

Luxury Stores are a boutique within a boutique... like a luxury establishment in a shopping district.

The launch of Luxury Stores is a testament to one thing: Amazon is getting ready to integrate luxury directly into its marketplace. These invitation-only high-end stores are a beta test: very soon, the general public will most likely go to Amazon to buy luxury ready-to-wear... and by that time, the brands present will have won everything. We warned you!

The best of our articles, every month in your mailbox

Bizon logo
© Bizon 2020
|
6 Rue du Général Clergerie - 75116 Paris

FACEBOOK SQUARE ICON
Twitter Square Icon
LinkedIn Square Icon
Youtube Square Icon
Drapeau Anglais

English

© Bizon 2020
|
6 Rue du Général Clergerie - 75116 Paris
Troupeau Bizon

Troupeau Bizon
FACEBOOK SQUARE ICON
Twitter Square Icon
LinkedIn Square Icon
Youtube Square Icon
Drapeau Anglais

English