Amazon is planning to launch a luxury fashion platform in the first half of this year, according to reports.
This isn’t Amazon’s first attempt at breaking into the luxury fashion market – the retail giant originally started trying in 2012, but was not successful.
Part of the problem the eCommerce brand’s image. Amazon struggles to sell high-end items next to rote objects like discount flashlights and bookshelves. This sort of placement has kept many luxury fashion brands away, even though Amazon has promised to not discount their items.
The new platform will work similarly to the concession model in department and specialty stores, where a brand will run a mini-shop inside a store.
Amazon’s new platform will give brands complete control over how the online space looks and feels, and what products they decide to sell. Participating brands will also have access to Amazon’s thorough and storied logistics network, which aids in speedy delivery and provides customer service.
There are around 12 brands reportedly working with Amazon, each of which will be introduced individually. The site will be introduced in America before it goes international.
Amazon is creating a $100 million marketing campaign and is also constructing a large warehouse in Arizona.
The company’s new approach to luxury fashion is similar to Alibaba’s Tmall, which is a brand-to-consumer site with luxury brands. Tmall debuted the Luxury Pavilion, a place where brands can exist away from the main site, in 2017. It has a completely different feel and aesthetic than the main site, and is meant to help the brands maintain their own identities.
Luxury eCommerce is a huge source of growth for brands, and Amazon offers attractive incentives. The company has a built-in audience of 100 million subscribers, many of which skew to higher end-demographics in terms of financials.
Investing giant Warren Buffett has warned that President Trump’s tariffs could hurt consumers.
“Tariffs are actually, we’ve had a lot of experience with them. They’re an act of war, to some degree,” Buffett, whose Berkshire Hathaway invests in a number of industries bound to be affected by the tariffs, said in an interview with CBS News Sunday (March 2).
“Over time, they are a tax on goods. I mean, the Tooth Fairy doesn’t pay ’em!” Buffett said. “And then what? You always have to ask that question in economics. You always say, ‘And then what?’”
Trump announced last week that the U.S. would impose new tariffs on Canada, Mexico and China beginning March 4. In a post on his Truth Social platform, he argued the tariffs will deter the flow of illegal drugs from Canada and Mexico, as well as the manufacturing and supply of drugs by China.
“We cannot allow this scourge to continue to harm the USA, and therefore, until it stops, or is seriously limited, the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled,” Trump wrote in the post.
“China will likewise be charged an additional 10% Tariff on that date,” he wrote. “The April Second Reciprocal Tariff date will remain in full force and effect.”
The levies on Canada and Mexico will be 25%, while the 10% tariff on China will be placed on top of the 10% one that took effect last month.
The tariffs have shaken U.S. consumer confidence, and have led to warnings from industry groups about their effect on commerce. For example, the National Restaurant Association has written to the president, saying the tariffs could cause that sector more than $12 billion and bring about higher menu prices.
“We urge you to exempt food and beverage products to minimize the impact on restaurant owners and consumers,” the association said in the letter seen by Bloomberg News. “This will help keep menu prices stable.”
Research by PYMNTS Intelligence shows that 57% of consumers and small businesses who consider themselves knowledgeable about the tariffs have a negative opinion of them.
“They’re not only worried about the big picture economy (though 40% are concerned about that, too),” PYMNTS CEO Karen Webster wrote last month.
“They’re worried about their own bottom line. That’s because 78% of those consumers anticipate higher prices and 75% expect product shortages. If you’re getting flashbacks to those empty store shelves during COVID, you’re not alone. It’s the same kind of anxiety that consumers now express, just with a different root cause.”