How luxury ecommerce brands like Mr Porter and Made.com are safeguarding themselves against Amazon
With almost $90bn in annual revenue Amazon is the most powerful online retailer in the world. Couple that with a penchant for gobbling up smaller companies to further its expansion aims and it's no wonder the US business has got other e-tailers quaking in their boots.
One area in particular Amazon has made no secret of its plans to dominate is fashion. The business first signalled its intent in 2008 when it bought Shopbop followed by a $900m deal for online shoe and clothing company Zappos in 2009. Since then Amazon has ramped up its efforts partnering with model Suki Waterhouse to front its AW15 clothing campaign and a failed takeover bid for Net-a-Porter.
While Amazon is yet to fully break into the world of high-fashion – luxury brands have been cautious to affiliate themselves with the retailer due to lack of premiumisation – those operating in the space (and other retail sectors) should still be “concerned” about the threat of the etailer, according to Mr Porter managing director Ian Tansley.
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“They are ruthlessly efficient so everyone needs to be concerned about them particularly if you’re selling products that Amazon do,” he said earlier today at the Intersection conference in London. “We are lucky enough that most of the time the luxury brands that we work with don’t want their products on Amazon and we provide them with a nicer environment and that’s what we will continue to do to try and differentiate ourselves both to suppliers and brand themselves and that that gives us a level of protection against Amazon.”
While the luxury sector may be safe for now, trouble looms at the lower end of fashion. Amazon already sells items from brands including Calvin Klein, UGG and DKNY Jeans leaving platforms such as Lyst, an online portal where consumers can curate and buy items from partners including Topshop, Saks Fifth Avenue and Pepe Jean, keeping a watchful eye on evolving search trends.
Chondita Chaterjee, US SVP and GM at Lyst, said that while she doesn’t see an immediate threat from Amazon (the platform sells both designer and high street clothing), she is “interested” to see what part search will play.
“One thing I do think about is that on mobile more and more searches are going away from traditional browser and towards app based search. One thing I will be interested in outside of designer luxury is how many of those searches are starting on the Amazon app. Is that traffic going straight to Amazon?”
Other retailers then are batting away Amazon by keeping up with its innovations such as click and collect and next day delivery. One such example comes from online furniture brand Made.com whose co-founder Chloe Mackintosh said was recently approached by the company.
“They came to see us. They are obviously trying to build a portfolio to complement [the business] especially brands who have a strong online brand – they don’t want to launch a new product,” she said. “For us it’s just a motivation to do what they do better. They did click-and-collect, we do click-and-collect. They do next day delivery we do next day delivery.
“It’s [about] catching up with the game. It’s very tiring and it is intimidating, but the consumers are very able to tell the difference between purchasing between Amazon and Made.com… they get a more emotional connection.”