As luxury retailers continue to navigate the challenges created by Covid-19, news that Amazon has re-entered the luxury market is likely raise a few eyebrows.
In a sector that has been traditionally slow to embrace e-commerce (the industry average for digital sales is around 5%), reports that the e-commerce giant is eyeing luxury consumers will no doubt accelerate the need for digital transformation and a greater use of consumer data.
It seems clear that Amazon's previous forays into the specialised world of luxury retail have informed their strategy this time around. Reports of a clear focus on the experiential dimension beloved of luxury shoppers suggests some brands will struggle to emulate Amazon's highly effective, frictionless digital retail model.
Some hope may lie in the Chinese market where Amazon is less prevalent. There are, however, other sizeable e-commerce dragons, such as Alibaba and WeChat, to battle on that front too.
However, given that Amazon can only sell what brands allow them to, there may be opportunities for luxury businesses to up their game and focus on giving their customers, many of whom still retain a strong affinity with their particular products, an experience and journey that retains their loyalty.
It may be that those that resist the lure of Amazon’s market presence could be the winners in the long run…