Should high-end brands avoid Amazon?
While Amazon seeks to add more luxury brands on its path to become the largest U.S. apparel seller by 2017, LVMH last week asserted it had no plans to start selling on the giant e-commerce site.
“We believe the business of Amazon does not fit with LVMH full stop and it does not fit with our brands,” LVMH CFO Jean-Jacques Guiony told investors on the company’s third-quarter conference call. “There is no way we can do business with them for the time being.”
The French company owns Louis Vuitton, Givenchy, Céline and a controlling stake in Dior, as well as number of high-end liquor, jewelry and watch brands.
The comments reflect a general apprehension by many high-end brands about e-commerce. These include concerns over pricing and counterfeits and whether online selling diminishes luxury’s cachet and exclusivity.
At the same time, Mr. Guiony’s statement speaks to sentiments that selling directly to Amazon is similar to selling to Walmart.
“For now, I think it is a smart move for LVMH to stay away from Amazon,” Jared Wiesel, partner at Revenue Analytics, told MarketWatch. “These two brands are polar opposites when it comes to what they stand for — Amazon is about access to everyday products at affordable prices for the masses, LVMH is about exclusivity and luxury.”
W Magazine notes that Amazon is gaining access to some designer brands such as Michael Kors and Kate Spade, but only entry-level goods and a limited selection.
Some feel Amazon must enhance its experience to support luxury selling. Yoox’s and Net-A-Porter’s luxury sites, for example, are filled with motivational content rather than deals.
Oliver Chen, the analyst at Cowen & Co. who asked the question on the conference call, however, believes LVMH has no choice but to consider Amazon or another dynamic online alternative given that luxury spending is bound to shift to online sales in the future.
He wrote in a research note, “Time is the new luxury and LVMH will need to look for omnichannel ways to add luxurious convenience and personalization to the selling and brand experience.”
- LVMH says no way will do business with Amazon – Reuters
- Louis Vuitton’s luxury goods are not available on Amazon — and that’s smart – MarketWatch
- LVMH Shuns Amazon, For Now… – Barrons
- You Won’t Be Able To Buy Louis Vuitton Off Amazon Anytime Soon – W Magazine
- Richemont Invites LVMH to Join Website to Compete With Amazon – Bloomberg
- Charting The Future Of Chanel – Vogue
DISCUSSION QUESTIONS: What are the pros and cons for luxury brands in selling on Amazon? Are the high-end vendor’s apprehensions valid about the risks of online selling and selling to Amazon?