“We’ve had a lot of conversations with high-end brands, especially luxury beauty brands, that are saying, ‘We need to have an Amazon strategy, how do we do that?’” said Elaine Kwon, a former Amazon employee and cofounder of Kwontified, which works with fashion and beauty brands on their Amazon launches before they happen and on their Amazon strategies as they sell through the marketplace.
“More and more brands, especially within the higher-end divisions of not only beauty but also fashion overall, are approaching Amazon in a number of ways,” Kwon said. “The bottom line is ‘we have to do something about it.’ What that entails manifests differently depending on the brand.”
Stifel analyst Mark Astrachan agreed it’s likely more prestige lines will trickle onto Amazon throughout 2018 — especially because even if brands don’t sell on the site directly, their products have a strong chance of winding up there anyway via unauthorized third-party sellers.
“I’d be willing to bet you’d see more, not less, bigger prestige-type assets sold on Amazon,” Astrachan said. “Whether it will be a lot of them or a jailbreak is unlikely, but I do think selectively the bigger brands will want to work with Amazon in a bigger way…It’s beneficial to their own revenue trends, it reduces dependence on department stores and if the right deal is struck, Amazon potentially helps police some of the pirated third party-sold beauty products that are already on the site.”
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Many prestige beauty brands have taken the Amazon plunge already and for some the platform drives a significant portion of sales. Oribe, for example, a professional hair-care brand with retail has been selling its $49 shampoos and $52 conditioners on the platform for a few years. Amazing Cosmetics, a concealer-focused line that sold in prestige retailers, has refocused its strategy to prioritize Amazon, QVC and Ulta Beauty over Sephora.
Wunder2 — more of a masstige proposition — opened Amazon shortly following a launch on its own site after the realization that that’s where the customer wanted to shop. Now the business allows customers to shop for its signature Wunderbrow product, about $20, and other goods via voice order with Amazon Alexa. About 25 percent of the brand’s sales come from Amazon.
Amazing Cosmetics, a prestige brand best known for its complexion products, had mulled over Amazon for a while before taking the leap in late 2017.
“We were almost ready to launch last year and pulled,” said Amazing founder Sue Katz in October. “I think the climate’s changed. Everything’s changed about retail — where she’s going to buy and how she’s buying and it’s really up to us as a brand to find her and make ourselves available where she is and cater to her habits. It became extremely clear to us that Amazon is where she is.”
Professional brands have also made the plunge. L’Oréal dipped a toe in the Amazon pool in the U.S. when it launched French pharmacy brand Vichy on the Luxury Beauty site a few years ago — and it’s done well, growing double-digits on the platform, senior vice president Carole Diarra told WWD in 2017. Now L’Oréal is testing the platform with professional hair brand Pureology, which sells its products on a new Salon & Spa page on Amazon’s beauty site, complete with videos and a salon-booking option.
But not all brands are Amazon friendly. At the Estée Lauder Cos., chief executive officer Fabrizio Freda has repeatedly stated that the company’s brands are staying away from the platform, focusing instead on specialty retail, their own e-commerce operations and alternatives like T-Mall.
The balancing act for beauty brands between wholesale and retail relationships and Amazon is a precarious one. Amazon debuts are widely known to damage relationships with retail partners, industry sources said.
“There are some luxury brands you’ll find at Sephora [that] are now launching on Amazon,” Kwon said. “Some of them feel confident in the relationship they have with channels like Sephora, and others say, ‘We’re going to be careful,’ but they also say, ‘We have to do this…if we don’t do it ourselves, someone else is going to do it.’”
“Someone else” means a third-party seller, which may be selling a product in a manner that doesn’t provide a good experience, Kwon said.
High-end merchandise hasn’t always been considered a natural fit for Amazon and many beauty sources have criticized the way the beauty category is presented as unsightly. But Kwon says Amazon’s higher-end partnerships outside of the beauty category, like with Zappos and ShopBop, which control pricing, have done well.
“Most of the brands, even if they start out doing it that way to dip their toe into Amazon…realize, ‘Ah, well OK, we’re having good traction on this platform, what would happen if we owned that entirely?’ That’s also turning heads,” Kwon said.