Amazon launches invite-only luxury offering in another blow to department stores
As if department stores didn’t have enough to contend with, there’s now another well-positioned peddler of high-end fashion on the scene and it’s a name everyone will recognize.
Amazon announced today the debut of Luxury Stores, a members-only fashion division within the regular app where consumers can purchase from upscale designers such as Oscar de la Renta. The store launches with the pre-fall and fall/winter 2020 collections, including handbags, ready-to-wear, accessories and the soon-to-launch childrenswear, of the New York-based de la Renta brand.
Certain "eligible" members of Amazon Prime in the U.S. received an invitation to the new luxe offering, Amazon said in a release. Other members are encouraged to request an invitation to the exclusive shop, which will offer a 360-degree view for shoppers to better view garments.
To promote Luxury Stores, Amazon released a 30-second film starring model Cara Delevingne. The video will air across digital and social media channels, according to a spokeswoman. Delevingne promoted it on her Instagram feed today.
Tyler Higgins, head of the retail practice at AArete, a global management consultancy, says Amazon will need to maintain the exclusive nature of high-end fashion in order to attract affluent consumers. “To lure those brands, Amazon is handing more autonomy to the brands, giving them the ability to maintain the consistency of their brand and connect directly with their preferred customer,” Higgins says, noting that Amazon’s customer data is another lure for brands who want to join the division.
Amazon’s new offering delivers yet another blow to traditional department stores, which were struggling long before the pandemic but have now had to contend with the loss of brick-and-mortar traffic as well. Earlier this month, Macy’s said online sales were up 53 percent but that sales in stores dropped 61 percent for the second quarter. And Neiman Marcus filed for bankruptcy protection earlier this year. While the upscale chain plans to exit restructuring, it is also closing several stores permanently.
“If Amazon is successful, and their track record shows that they usually are, high-end department stores and high-end fashion retailers within malls will continue to decline or fold,” says Higgins.
Even discounters who sell via brick-and-mortar are in trouble. Last week, iconic New York-based off-price retailer Century 21 said it was filing for bankruptcy protection and shutting down for good.
The offering also gives Amazon a leg-up in the luxury space as its core shopping business faces more competition. Walmart recently launched its biggest marketing campaign of the year in support of its Walmart+, a new membership program debuting today that directly competes with Amazon Prime.