There's no doubt Amazon has already mastered the art of selling groceries and other essential goods online. But the company aims to be more than that. It's focusing on streaming technologies, with services like Prime Video and Music Unlimited, a rival to Spotify and Apple Music. Then there's fashion, a space that may be the hardest (though not impossible) to conquer. While Amazon isn't new to selling clothes, the company sees high-fashion retail as its next holy grail. It wants to be the place where you can have a $12 Hanes hoodie and a $1,500 Louis Vuitton frock in the same cart.
Over the past few months, the company has been ramping up efforts in fashion, starting with the quiet launch of seven in-house brands in February. By introducing Franklin & Freeman, Franklin Tailored, James & Erin, Lark & Ro, Society New York, North Eleven and Scout + Ro, Amazon was able to start covering its bases. More specifically, it meant not having to rely solely on products from third-party brands. The lines, which are designed to be affordable, offer close to 2,000 clothing pieces for men, women and children.
What's more, the retailer shut down its Gilt competitor MyHabit, a site that sold name-brand apparel at deep discounts, last May in order to send that traffic to its main site. Much to their surprise, MyHabit users were told to begin shopping on the fashion section of Amazon.com. The company, which declined to comment for this article, told WWD in April the decision was meant to "simplify" its offering, noting that fashion is one of its "fastest-growing" categories.
Of course, it makes sense for Amazon to reap the benefits of its more than 300 million active users. That number is particularly notable, because 63 million are paid Prime members, meaning they're likely to spend money on the site regularly.
The problem is, as Amazon's plans get more ambitious -- like trying to become the online destination for couture -- there's bound to be some pushback from established players in fashion. Earlier this month, Amazon kicked off a $15 million advertising campaign in an attempt to brand itself as a high-fashion retailer. As part of this strategy, it introduced a TV spot in Europe titled "Delivering Fashion," showing what appear to be supermodels delivering Prime boxes to different places. It's a small taste of what Amazon Fashion aims to be.
At the same time, though, LVMH, which owns Celine, Dior, Givenchy, Louis Vuitton and several other luxury labels, recently said it won't be working with Amazon anytime soon. "We believe the business of Amazon does not fit with LVMH, full stop, and it does not fit with our brands," Jean-Jacques Guiony, LVMH's chief financial officer, said to investors during an earnings call last week. "There is no way we can do business with them for the time being."
As it stands, LVMH, which told Engadget it had no further comment, relies solely on its own distribution channels. With Louis Vuitton, for example, the company sells products only at namesake stores around the world as well as its website. Even shop-in-shop experiences coordinated with retailers like Neiman Marcus are always staffed by LVMH employees. For luxury brands, having full control of the retail experience is paramount. As such, Guiony's statements aren't shocking, but they're definitely not what Amazon wants to hear.
The perspective from industry insiders is that LVMH and other luxury goods makers are wary of Amazon because they don't want to devalue their brands. That's an understandable concern when you consider that a piece of expensive clothing would be sold alongside toilet paper, food and other conventional goods.
"As we saw several years ago when Louis Vuitton began producing some bags in larger quantities and offering lower-priced options," says Julie Zerbo, founder and editor-in-chief of The Fashion Law, "demand and sales dropped off quite significantly." That's the reason the brand doesn't do it anymore. She adds that, because what companies like LVMH sell is priced high and thrives on the notion of exclusivity, something as "seemingly insignificant as selling on Amazon could be hugely detrimental."
Not all is lost for Amazon, however. Marc Jacobs (owned by LVMH), BCBGeneration, Rachel Zoe and Tommy Hilfiger are respectable fashion brands with a presence on the platform. These may not be as luxurious as Louis Vuitton, Dior or Givenchy, but they help Amazon Fashion have a more robust catalog. Meanwhile, others, such as Michael Kors (which isn't considered high fashion by most in the industry), have certain limits. The brand doesn't sell clothes on Amazon; it lists only jewelry, watches (including smart ones) and fitness trackers.
Michael Kors declined our request for an interview, but a spokesperson told Engadget the company doesn't officially sell any other categories through Amazon "at this time." So if you've ever bought Michael Kors clothing on Amazon, there's a chance it could be counterfeit. Earlier this year, upscale footwear designer Birkenstock said it would stop doing business with Amazon, citing an increase of counterfeit goods on the site and "a constant stream of unidentifiable unauthorized resellers."
In an email to retail partners about the decision, Birkenstock CEO David Kahan wrote, "Policing this activity internally and in partnership with Amazon.com has proven impossible." Kirthi Kalyanam, director of Santa Clara University's Retail Management Institute, says Amazon has a "presentation problem." He notes that the brand experience is off because Amazon allows third-party resellers on the platform who might sell unauthorized products from a luxury fashion house. "Until the proper marketplace reseller arrangements are in place," he says, "luxury brands will be cautious."
You don't have to go far back in time to know this as a major issue for Amazon. Just last week, Apple filed a lawsuit alleging most Lightning cables and chargers sold on Amazon are fake. The suit claims these accessories are "poorly constructed" and "pose an immediate threat to consumer safety." Although the products being sold were "Fulfilled by Amazon," third-party sellers are core to Amazon's e-commerce business.
"For luxury brands, controlling the chains of sellers is extremely important for maintaining brand image and exclusivity," says Zerbo. "But they also need to ensure authenticity and quality, both in terms of the products themselves and the customer experience."
What helps Amazon Fashion is the fact it's still a work in progress, and it can use cases like Birkenstock's to improve the platform for both labels and buyers. But the retail giant will need a lot more than a $15 million ad campaign to appeal to the LVMHs of the world and, most important, the people who want to buy that type of merchandise without questioning its authenticity. It can start by cracking down on dubious third-party sellers, though even that may not be enough to make buying authorized Louis Vuitton bags on Amazon a reality.