Luxury brands still have an aversion to selling their wares on

This story first appeared in the November 24, 2014 issue of WWD. Subscribe Today.

This is the key finding in a new study that L2 Inc. will release today that looks at the luxury fashion vertical on the e-commerce giant.

“The number of fashion brands working with them is really anemic and must be very disappointing to them after what’s been several years of effort in this category,” Scott Galloway, New York University marketing professor and cofounder of L2, told WWD Friday.

Amazon has been open about wanting to ramp up its place in the designer-fashion realm — it acquired Shopbop in 2006, Zappos in 2009, launched flash-sale site MyHabit in 2011 and last year opened a 40,000-square-foot fashion studio to cater to its growing fashion vertical, Amazon Fashion, which rolled out in 2012.

But when it comes to L2’s list of the top 100 global prestige brands, Galloway said Amazon is “effectively nowhere,” with just 16 percent of these brands officially distributing to Amazon.

RELATED CONTENT: WWD Research Roundup >>

Of the 32 designers covered in the report that are distributed on the site, just five do so in an official capacity: Calvin Klein, Kate Spade, Cole Haan, Tommy Hilfiger and Diane von Furstenberg (the latter two joined Amazon in the third quarter of this year). However, their average price points are markedly lower than brands that are under the Compagnie Financière Richemont, Kering Group or LVMH Moët Hennessy Louis Vuitton umbrellas and fall more into a midtier or contemporary price range.

Upon search for a specific brand on — like Burberry or Oscar de la Renta, for example — a lot of stockkeeping units might come up, but the majority of these items are categories that the company licenses out, like sunglasses or fragrance, and are sold via third-party retailers rather than directly by the brands, Galloway explained. The same holds true for Zappos; when a consumer searches for “Valentino” on the e-tailer, they are told that the site carries the brand, but it’s only sunglasses and fragrances.

RELATED STORY: Amazon Plans Fashion Photography Studio in London >>

Brands not officially part of the Amazon platform have, on average, 1,170 products available, while Calvin Klein — an official partner — has about 12,000, largely from a robust network of licensing agreements.

Galloway said this “unofficial distribution” is irking the brands.

Two years ago, when Amazon introduced its fashion vertical, it was made clear that the notion of deep discounting would not pertain to high-end fashion brands. Also, the brands wouldn’t have to take back unsold inventory at the end of a season. But this has failed to attract a significant number of high-caliber brands.

Galloway said to build its fashion cred, Amazon should focus its sights outside the confines of the company.

“Amazon’s best investment would be to buy Net-a-porter, if they are serious [about fashion]. The fashion brands just don’t want to roll with Amazon,” Galloway said.

Galloway concurs that Shopbop, MyHabit and Zappos are exceptions, as these e-tailers have higher designer penetration than their parent company.

An Amazon spokeswoman did not return requests for comment.

load comments
blog comments powered by Disqus