Luxury brands and retailers that think they’re safe from the disruptive force of Amazon are sorely mistaken.
So said Shullman Research Center’s recently published report, “Is Amazon Coming Into its Prime?” which advised upscale marketers and sellers alike to think strategically about how they plan to compete with the online giant—and they will have to compete, as Amazon continues to infiltrate both the lower and higher ends of the market. Not to mention, all of the perks provided by Amazon’s paid Prime subscription service, as well as generous return and refund policies.
Shullman studied surveys and interviews with nearly 3,000 consumers of varying income levels and discovered that higher-earning Americans are now shopping more frequently on Amazon.com. In fact, as household income increases (up to $250,000 and higher), Amazon’s penetration does, too.
With almost two-thirds of the e-tailer’s customers shopping on Amazon at least once a month, on average, the research group found that higher-earning households spend more and often. When asked to compare the site with other stores at which they shop, almost three-quarters of Amazon’s customers rate it better. One-stop shopping, a wide range of goods and services, competitive pricing and convenience are all listed as reasons why, and Shullman pointed out that these customers each listed two or more benefits.
The research center’s data also highlighted the growing popularity of Prime: about four in 10 claim to be subscribers, compared with one-third in the last survey, citing video and music streaming, unlimited photo storage and free e-books as reasons why.
“What happens if Amazon eventually launches a luxury website targeting upscale and very-high-income consumers? It already has its own fashion site that currently does not target affluent customers with more upscale and luxury offerings,” Shullman said, noting the seven private labels the e-tailer launched earlier this year. “Time will tell what’s next.”
With that being said, for Amazon to truly become a force to be reckoned with in upscale retail, it will have to first fix its counterfeiting problem. Just last week, Birkenstock—albeit not a luxury brand—said it will stop supplying its products to Amazon in the U.S. and won’t authorize the sale of its footwear by third-party merchants on the site either.
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