The five-year-old e-commerce site is Amazon Payments’s first luxury partner and the two are embarking on a symbiotic relationship that marries payments, marketing and the in-store experience.
It’s no secret that Amazon has spent the past decade growing its fashion profile. This started with the acquisition of online retail destinations such as Shopbop and MyHabit and has since expanded to significant on-site efforts that have made fashion one of the e-tail giant’s biggest categories. Until now, though, the company has yet to implement a meaningful luxury fashion play, focusing on the contemporary segment and below.
The first initiative — which softly launched last week — in the multipronged partnership allows Moda Operandi customers to use their Amazon accounts to check out on the high-end e-commerce site. Next month, Amazon will roll out a new advertising product that can target consumers on its own platform and direct them to Modaoperandi.com, taking Amazon’s hundreds of millions of consumers and turning them into potential designer shoppers. Lastly, a series of first-to-market tools developed by Amazon will be implemented within Moda’s physical showroom and retail spaces. The tools allow shoppers to use their Amazon identities to check out.
“We are not putting ourselves between the merchant and customer — that would be really, really wrong. The way that merchants decide to engage the consumer is still within their own control,” Patrick Gauthier, vice president of Amazon Payments, told WWD, clarifying that this is not an Amazon Fashion play but a partnership that falls within the realm of Amazon Seller Services. “What we’re doing is making it easy for merchants to recognize that customer — online, on mobile and in-store — and then that enables personalization and a more frictionless journey.”
He stressed that the Moda deal is much larger than just a payments implementation and the “checkout process.” It’s the notion of “checking in” that Gauthier sees as alleviating consumer pain points in the shopping experience — that is where the relationship with the merchant begins. If a first-time Moda shopper is asked to input all of their shipping and billing information, for instance, it might deter them from completing the purchase. But if they are an Amazon member — which is likely — they can access all of their information with the click of a button. Also, once they are signed in, Amazon is able to follow the Moda shopping journey from its Web site to a mobile device and, soon, the physical world.
Deborah Nicodemus, chief executive officer of Moda Operandi, pointed out that just two days after launching the Pay With Amazon function a woman in Hong Kong purchased a $12,000 ring from Moda.
“It hits all the points. It’s a new customer: She was from Hong Kong and she purchased a very expensive piece of fine jewelry,” Nicodemus said.
In the ceo’s view, this is just the beginning. Mirroring Gauthier’s sentiments, Nicodemus explained that the next stage of the relationship must address the barriers to new customers, such as asking them to set up an account with Moda. “This barrier can be removed when this potential client is an existing client to Amazon. This intersection is defined by this piece of fine jewelry we sold,” Nicodemus said.
Many brands and retailers have been reluctant to work with Amazon, viewing it as the two-ton gorilla that aims to befriend them — and then eventually crush them. Moda views nothing but opportunity, however.
“Instead of being scared, why not take advantage of what they are strong at?” said Evelyn Kim, chief marketing officer of Moda Operandi, adding that “there is an overlap between the Amazon customer and our potential and existing customers.”
While that last statement sounds peculiar at first — because Moda Operandi’s average order value is well into the multiple thousands of dollars and Amazon’s is generally not — it’s a safe bet that most of Moda’s customers purchase from Amazon on a semiregular basis.
It’s not about the price points, though, Kim insisted. When it comes to the level of service Amazon provides — from ease of payment to customer service and logistics — the Seattle-based e-tailer is indeed a luxury company in its own right.
“What is a truly luxury service? It’s making sure that the whole experience is easy and smooth and saves time. It just has to work beautifully — that is ultimately what a luxury experience should be, and this is one of the reasons why many people like myself shop at Amazon,” Kim said.
While she’s clear that product-wise Amazon is not a competitor to Moda, the two share fundamental objectives: they’re both customer-centric, they’re both tech companies and they both obsess over innovation in their respective markets. And that is where the synergy lies.
Plus, the relationship benefits both parties. Amazon can align itself with a luxury site and Moda can leverage the $107 billion dollar e-commerce behemoth’s technology. Amazon historically buys its own inventory, but with this partnership the company edges into designer fashion while all the inventory risk goes to Moda, which results in a low financial commitment for Amazon. For Moda, Amazon’s soon to launch Full Circle ads will drive more traffic to Modaoperandi.com than ever before.
“We’re going to talk to Amazon’s clients online and through more specific data mining. The way I see it is that they [Amazon] can make the discovering experience personalized because they are good at guiding customers through massive amounts of product on site — because they have data. They know what they want to buy and what they’re interested in,” Kim said.
She’s hopeful that customers will take advantage of the “Pay With Amazon” option, and confirmed the team is already “working behind the scenes” with Amazon to see if Moda can create an operations system that incorporates the shipping services that are available to Amazon Prime members.
Keiron McCammon, chief technology officer of Moda Operandi, called it a “first” in the sector, explaining that the e-tailer is partnering with Amazon to really “tap into their network.”
“Think of all the touchpoints they have with clients, from their site to Kindle devices to watching as you travel to other sites. They have an awful lot of information,” McCammon said. “On our behalf, they can advertise Moda and bring their customers to shop [on Moda], and then those customers can have access to luxury product that they won’t find on the Amazon network.”
In the past, Amazon executives have said their main focus was on the contemporary sector. Luxury was not believed to be on the list of priorities for the Seattle-based company.
Jeff Yurcisin, vice president of clothing at Amazon Fashion and general manager and ceo of Shopbop, acknowledged last October at the WWD CEO Summit that Amazon was still not ready to penetrate the luxury sector.
“Luxury brands are being thoughtful in the way they build their presences online,” Yurcisin said, adding that if and when Amazon can deliver an experience that is appropriate for them, he would urge them to consider the site.
Amazon has invested heavily in its Amazon Fashion business the past few years, including the opening of a designer shop-in-shop with Derek Lam 10 Crosby on Amazon.com in 2013 and later that year opening a 40,000-square-foot photo studio in Williamsburg, Brooklyn, N.Y. An immersive Amazon Fashion advertising campaign — including digital, print and TV spots — began in March 2013.
And while not a luxury fashion play, public job listings posted in February revealed that Amazon plans to further develop its private label brands, which quietly launched this year. At least seven private label brands — Franklin & Freeman, Franklin Tailored, James & Erin, Lark & Ro, North Eleven, Scout + Ro and Society New York — are live on Amazon.com.
Asked if Moda’s partnership is exclusive to Amazon, Gauthier replied: “We always start from the customer, and customers certainly have brands and retailers they prefer. Rarely do they shop exclusively with one, right? It’s obvious that we have to be able to enable as many retailers as possible.”
So even if Moda Operandi happens to be one of many designer e-tailers that Amazon teams up with in the near future, at least the commerce giant has hundreds of millions of customers to go around.