Recently Amazon's negotiations with the Swatch Group(Manufacturer of Omega watches and other high end accessories) fell through, they viewed Amazon as a risk and not a place that really went with their brand. The risk of counterfeit products is too high on Amazon and they want a guarantee from Amazon that they will be proactive in keeping out these counterfeit products, Amazon refuses to make that commitment. Amazon has the view that problems like counterfeit products lies solely on the shoulders of the manufacturers themselves, not on Amazon. Some other lower luxury brands have gone to Amazon, such as Calvin Klein, but overall luxury brands don't think Amazon has the luxury value or the exclusivity that allows them to keep higher prices. The real question is though will they be able to ignore the huge Amazon marketplace? What do you think the effect of large luxury brands being on Amazon have on their sales and prices?
https://www.wsj.com/articles/amazon-has-a-luxury-problem-1507460401
I think it would cost more for Amazon to prevent this type of fraud than the value it would bring from having high end products. And I don't think it would significantly effect the large luxury brands. They have their own certified websites, and their target markets are likely to be different than Amazon's.
ReplyDeleteI agree with Haley that it could cost more for Amazon to prevent this type of fraud. In addition, I think that Swatch Group would have better results if they are not being sold on Amazon. When a luxury item producing firm, like Swatch Group is on Amazon, its image could be switched from a luxury item to a common item. This could hurt the Swatch Group's revenues because they will not be seen as exclusive, and people will no longer have the desire to want it, because everyone can get it. To play devil's advocate, Apple products are sold on Amazon, and I believe that they are still looked at as luxury goods.
ReplyDeleteI agree with what Haley and Erin have said, I also think the exclusivity of luxury brands is the reason why they can keep their higher prices and doing business with Amazon would overall not be good for Amazon or the luxury brands.
ReplyDeleteThis is an interesting article to me. I think more deals are going to be tried between Amazon and other luxury companies because of who Amazon is and how they are revolutionizing the way people shop today. I agree that the Swatch group has their own website and make sales from that however Amazon is frequented much more often by the common shopper than the Swatch groups site. I understand both sides to the argument, but in the future I believe deals like these will start to happen and you will see more luxury items on Amazons site.
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