How Luxury Brands and Amazon Work Together in 2021

Luxury Brands and Amazon
Luxury Brands and Amazon

For many years, high-end luxury brands have resisted Amazon and other online marketplaces for a variety of reasons. However, after the traditional retail market was turned upside down in 2020, they have been forced to reconsider. In this blog post, we share more history and elaborate on how luxury retail and Amazon can form a mutually beneficial relationship. Continue reading to learn more and for considerations that could change the game for your brand.

Viewing Amazon as an Asset Rather than an Enemy 

At a high level, Amazon’s platform is often assumed to be for products with low prices and quick shipping only. Through the lens of a high-end designer, or premium skincare brand, expedited and low-cost doesn’t align with their company’s mission. However, it’s likely many of these brands are already represented on Amazon by third-party resellers. With this, luxury brands need to consider the benefits of the platform beyond selling products and driving revenue. Doing so will allow for more control of their presence, narrative, and reputation. Alternatively, avoiding the channel out of fear of devaluing the brand can do more harm than good.

Taking this a step further, Amazon’s massive customer base is hard to ignore, even for reluctant luxury brands. Regardless of the average price tag of a brand’s product, their ideal customer is almost guaranteed to be on Amazon as well.

Amazon’s Extensive Private Label Presence

Another concern of high-end brands is the potential of imitation products being created by Amazon’s private label. Yet, there are several strong counters to this. The primary argument being Amazon’s private label isn’t focused on luxury products, fashion, or beauty. Even so, it’s important to remember, whether a successful product is sold on Amazon or not, it can be recreated and sold on Amazon by Amazon or any other brand.

The Threat of Counterfeit Goods is Dwindling 

Next is the threat of counterfeits. While counterfeit products exist on the channel, this shouldn’t be something that holds a brand back. Amazon is committed to reducing the opportunity for counterfeits to be sold on its channel. Whether it’s via Brand Registry or the Counterfeits Crime Unit, Amazon is dedicated to protecting the legitimacy of its marketplace the trust it has from consumers.

In addition to Amazon’s ongoing efforts, there is plenty a brand can do to ensure the integrity of its products is maintained on Amazon. Aside from becoming Brand Registered and creating a Store or Luxury Store, we suggest focusing on the user experience. To do this, we support our clients by consistently monitoring their catalog, merging duplicates, and much more

Bridging the Gap Between Luxury Brands and Consumers in a Disrupted Landscape 

As mentioned, despite the resistance, Amazon has taken steps to ensure a premium experience for luxury brands. And this has become more prevalent during 2020 and 2021. Prior to the pandemic, high-end retailers had the lure of an in-store experience as one of their value propositions. But, when coronavirus closed businesses’ doors, that was taken away. With this, those that embraced e-commerce and online marketplaces were able to overcome this challenge. In fact, according to Bain & Company, online luxury purchases reached $58 billion, compared to $39 billion during the year before. 

Now, more than ever, it’s important to do what it takes to reach customers where they are and offer what they need. And it’s possible for luxury brands can do so, via Amazon, without losing their luster.

Strategic Considerations 

There is a range of features available to luxury brands on Amazon that allow them to offer shoppers a premium experience. To name a few, there are Luxury Stores, live videos, and Amazon posts. In addition, Amazon offers those in a specific category an enhanced user experience within Amazon. For example, the Premium Beauty category where product detail pages also include a Premium Beauty tag

Luxury Brands and Amazon

To gain access to these features and interfaces, brands must first ensure they’re selling in the proper category on Amazon.

Regardless of which tactics a brand decides to leverage, staying customer-focused is key. If a brand is providing shoppers a high-quality experience, it doesn’t matter which platform or channel they’re using. Consumers will remember whether they enjoyed shopping for a product or found it challenging. And this can be a deciding factor in whether they convert or return. 

Final Thoughts 

As e-commerce continues to be a primary driver for brands, Amazon and other marketplaces can’t be ignored. Even those that once shied away from the platform are finding Amazon and its exclusive features to be worthwhile and effective. 

If you could use the support of a strategic partner, schedule a free consultation. And, as always, we’re here to answer any questions about your brand’s presence on Amazon and other marketplaces. Finally, should you be interested in learning more about the results our clients experience through a partnership with MPS, check out these resources

Hannah West Dalpiaz

Hannah West Dalpiaz