With a business as tremendously successful as Amazon, the obvious challenge is how to continually keep up profit growth. You started out selling books and CDs, expanded to a wide assortment of CPG products, then allowed other sellers to list items on the site. You developed the first e-reader to gain significant acceptance, and you bought a beloved shoe retailer.
What next? Luxury goods!
It makes sense, in a way. After all, certain retail partners are selling name brand clothes on the site. Hell, you can even buy a Rolex, typically used, on Amazon from a variety of 3rd parties. And, Amazon has seen a variety of luxury e-tail and flash sale sites launch and gain ground over the past 2 years - from Gilt.com, Net-a-Porter (and its male counterpart, MrPorter), etc. (BTW, very good article on AHALife in the New York Times from last week.)
The trouble is: luxury is hard. The number of brands and companies that have failed is reminiscent of the ascent up Everest. You need the right brands, the right assortment from those brands (i.e., not just the sorry remainders that didn't sell) shown with the best photography in the right context with the right merchandising on the right models. Luxury shoppers are somewhat more discerning about fit and material, so you need ample descriptions and the ability to zoom in. It's also worth noting that the descriptions need to be more than 'Size 32', something that Gilt has done very successfully by offering the size that the model is wearing along with his/her height, waist, etc.
If you don't hit all of these marks, you'll be challenged to retain - let alone acquire - much of an audience. Already, as I've written, Boutiques.com's traffic has cratered. And now we have Amazon's entrant into the field, MyHabit.com, which could just as well be the name of a drug rehab site.
Let's have a look at its touchpoints.
1. Email: MyHabit sends out a daily email. There's nothing special about it: design, offers or brands.
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| MyHabit's welcome email: Not terrible visually, but nothing alluring. Surprisingly, there's no list of brands on the site. One wonders why... |
After the welcome email, like many other luxury flash ecommerce sites, one receives a daily email with the brands of the day. I'm sure there's stiff competition for the best brands, but I haven't heard of many of the brands that MyHabit sells.
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| I have heard of Nanette Lepore and Charles Jourdan, but not Scott James (in the lead position!) and Paige Novick. This isn't necessarily a problem - there are plenty of great luxury brands not on my radar - but one would think MyHabit would try to start off with better known ones. |
2. Website: MyHabit's website is rather barebones. From what I can tell, it feels like an efficient selling machine, but has no discernible identity - which seems to be a critical component of successful luxury ecommerce. I could imagine what a Gilt retail space might look like, but not MyHabit. It is vibe-free. It doesn't stoke desire.
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| Product page for the Scott James Collection. It does offer a nice Flash video of the model doing a "turnaround," which is great unless you try to view it on an Apple iOS device. |
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| Here's another product page for a dress by Donna Morgan, another brand I've never heard of. Again, this is not necessarily a bad thing, but many of these brands are not exactly Vogue or HighSnobiety material... |
But luxury shouldn't be rushed, and if Amazon was going to enter the field, it really should have tried to innovate, not deliver an approximate (often lower quality) version of what already existed. That's what mass fashion brands do.
I can imagine at a planning meeting in Washington where this idea was hatched, the strategy team argued that there's a great business opportunity and a wide swath of less affluent consumers (than Gilt and NetaPorter) who want to participate in the flash shopping craze, but can't relate to, or afford, the brands that Gilt offers.
This might be a great target audience segment and perhaps a great strategy, but I'd argue that these consumers still want the experience that luxury promises, even if they can't afford the products themselves...though truth be told, they want the products as well. That's why luxury frequently offers diffusion lines. (And, in fairness, MyHabit did offer Varvatos' step-down line.)
Amazon's MyHabit doesn't seem to deliver either. I think it could, but it needs a 'hard reset' immediately, possibly taking the site offline for a re-think - from the logo through the entire digital experience.
I wouldn't count Amazon out of the business yet. It's too shrewd and smart.
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