Just ask luxury brands, who are still extremely hesitant to put their products on the one-stop-shop for everything and anything. Just 8% of luxury brands sold on Amazon in Q4 of 2017, compared to 17% of contemporary brands and 46% of mid-market brands. And the high-end brands that are on Amazon focus on just a few select categories, like Michael Kors, which exclusively lists women’s watches.
Why the resistance?
Let’s set aside the fact that 86% of Amazon’s 80 private labels sell and advertise apparel and jewelry of their own all over their site. For now, let’s also disregard the wild, wild west of unauthorized third-party distributors selling “gray” product and focus on the customer.
Amazon is meant for basics. The best selling apparel items by category in 2017 were basic T-shirts for both men and women, with underwear and socks coming in second and third. Additionally, the average price of a best seller in Q4 2017 was only $34.40, an average spend that simply won’t result in positive return on investment for luxury brands.
Nor does it help that Amazon’s search algorithm factors in reviews and ratings heavily to suggest products, while very few brands allow reviews on their own sites (9% adoption in 2017) where they could theoretically control them or roll them up.
Customers shop Amazon if they know what they want and they want to get it quickly and cheaply.
But what if customers want the leisurely, high-touch shopping experience they are used to in a luxury store where they get to hear about the details of every product from experienced sales associates?
To compete with Amazon’s overwhelming momentum and convert sales on their own sites, luxury brands need to attack the digital customer experience where Amazon is weak: guided selling and product discovery.
In 2017, we saw fashion brands start to catch on. Almost half of brands in Gartner L2’s Digital IQ Index: Fashion boasted blogs, up 16% from 2016. These blogs, which cover new campaign releases, runway shows, and behind the scenes exclusives, are a great place for a brand to engage customers and shape brand affinities while talking about their products.
The key is conversion.
Only two-thirds of blogs last year linked customers to product pages where they could make a purchase, static year-over-year from 2016. If brands aren’t taking their customers from the point of engagement and discovery to converting the sale, they are missing the crucial component to delivering results.