Will Amazon also be able to conquer luxury in Europe? The new Luxury Stores platform will have to deal with a tough competition

A year after its birth, and after the first successes on the American market, Amazon will bring its platform dedicated to fashion designers, Luxury Stores, also in Europe. Details have not yet been released on which brands will decide to join the platform – although, as reported by WWD, Dundas and Elie Saab have already confirmed their presence. For the other brands on the platform instead, which include names such as Oscar de la Renta, Missoni, Altuzarra, Rodarte, Christopher Kane and Boglioli among others, joining the platform is very likely even if not yet confirmed. The expansion of Amazon's new business was motivated by good commercial results, also due to the progressive recession that affected the large American department stores in time of Covid, but also the extraordinary growth in online fashion sales during the pandemic: Vestiaire Collective reported a 119% increase in orders last May while Zalando saw a 34% increase in sales,  Farfetch gained 900,000 new customers during the pandemic while Bain & Company estimated that in 2020 online channels accounted for 23% of fashion industry sales.

Amazon's decision to enter the world of fashion therefore seems natural given the expansion of the market and the new need of many brands to address a global audience. But in general, the main doubts that Amazon's announcement raises concern the inclusion of the new platform within a commercial ecosystem such as the European one, on the one hand dominated by the big luxury fashion brands, on the other already occupied by a series of luxury retailers such as Farfetch, Net-a-Porter or Zalando.

Why has Amazon Luxury Stores been successful so far?

Neves' statement, among other things, also highlights another problem: that of brand positioning. The intriseco value of any brand is in fact built by association: if a new brand, never heard before, appeared on Farfetch alongside the big names in luxury it would immediately be perceived as luxurious, but the speech would be different if it appeared on Asos or Zalando, platforms dedicated to the medium-high range but not to luxury. The aesthetics of Luxury Stores still have various updates to do in visual terms, and it is still a slightly more minimalistic version of that of Amazon with some images that even appear blurry. To sell luxury you need a luxurious platform - and on this plan Amazon will have to compete with the already developed platforms of its European competitors.

If Amazon Luxury Stores wants to succeed in Europe, therefore, it will certainly have to face a highly competitive environment, even if it can count on many local independent brands eager to access a wider platform. Another thorny issue is that of the big names in luxury: hardly a mega-brand, already part of an industrial group, equipped with its own e-commerce as well as other channels in already established luxury retailers, will add Amazon to the list of its wholesalers. The strategy will probably be to focus on heritage brands independent of consolidated customers, such as Missoni and Boglioli in Italy, but also potentially Moschino, given the close synergy with Jeremy Scott with Making the Cut, but also Chiara Ferragni, another guest of the reality show, or Alberta Ferretti, another luxury brand already present on Zalando like Moschino. All these independent luxury brands could benefit from their presence on a popular platform like Amazon's, increasing their credibility with their presence.