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Retail Logistics: Even Luxury Fashion Can Learn from Amazon

Retail Logistics: Even Luxury Fashion Can Learn from Amazon

September 16, 2017

Thanks to Amazon, now even luxury retail customers are frustrated with the in-store experience.

Amazon is one of the largest retailers in the world, and within the year will be the largest retailer of fashion apparel and accessories, with sales upwards of $28 billion and an overall market share expected to reach 16.2% within the next 5 years according to Cowen & Co. Their overall growth and market dominance have made seismic shifts in the retail landscape at large. Until recently, Luxury fashion has been seemingly immune to this market dominance but that’s changing quickly.

Charisma, myth, magic, and fantasy abound in the luxury market where purchases are highly emotional. Luxury fashion is centered on the highest aesthetic representation in a product, focusing on the creative direction of a tightly held brand identity. The selling of luxury products is more than a transaction and involves a high level of personal touch. While Amazon may not be the channel for selling high-end luxury fashion (at least not at present), its impact on the changing consumer is undeniable.

Consumers Expect Every Store to Be ‘Friction-less’ Like Amazon

Amazon has created a certain expectation among consumers today about how, when, and in what manner they will receive their purchased goods. When you order from Amazon, you know when the item ships and when it will arrive, exactly. They are exceptionally reliable, they make purchasing easy and effortless, and if there are any issues, they resolve them quickly and to customer satisfaction. This is the new normal in the consumer’s mind. This is what she is expecting now with every purchase she makes.

How Luxury Brands Often Disappoint Shoppers

What is her experience when shopping luxury? Often it is far from efficient or easy. This is due to the lack of technological advancements within the luxury fashion space, particularly in logistics and supply chain management. This may not be a sexy topic but it is essential to competing in today’s rocky retail climate.

Some e-commerce luxury retailers are able to meet these expectations, such as Farfetch and Net-aPorter. These both offer same day delivery service in certain major cities and can even narrow the product delivery to within 2 hours in some cases. But these examples are not the industry norm. Obviously traditional brick-and-mortar is struggling to keep up pace but also, the fashion brands themselves lack logistical technology integration. Some luxury fashion brands have such large shipping and delivery windows, with minimal accurate timing to market, that it results in missed sales and declining consumer interest in certain products.

Turn Lessons Gleaned From Amazon into a Part of Your Brand DNA

Luxury fashion does not necessarily need to be on the timing schedule of fast fashion, but a certain level of improvement in the logistical arena could mean greater returns and achieving higher margins. The industry may never reach Amazon levels of logistical sophistication, and it may never want to. But at the very least, it should consider the valuable insights Amazon provides in shaping consumer expectations and purchasing behaviors, and follow suit in a way that fits their business model.

Author: Keila Tyner, PhD
Ms. Tyner is Selling Director – Women’s Designer Shoes at Saks Fifth Avenue, New York. She also teaches and writes about everything from the industry, to the psychology of fashion.

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