Amazon Store

Amazon Wades into the Luxury Beauty Market

Amazon added another tributary to its vast marketplace and distribution network. The online retailer launched a Luxury Beauty Store not long ago. Consumers are able to spend hundreds if not thousands of dollars on personal care items without so much as testing them out first.

Never mind that luxury beauty items bought on Amazon — like wine, live insects and even breast pumps (in the case of breast pumps, those that have been opened and…gulp…used) — might not be returnable. If you have to ask whether a product is refund-eligible, especially a luxury item, you probably shouldn’t risk your hard-earned dollars on it, especially online.

That said, industry watchers have already weighed in with predictions about whether the luxury store will be good for Amazon or the sector it impacts. Is the day coming when practically anything (live insects!) can be bought on Amazon? Will marketing even matter at that point? Or does Amazon’s move mean that marketing will be even more important — especially to beauty e-commerce sites forced to compete with Amazon?

Changing the beauty game, one click at a time

While still up for debate, a central idea still holds in this discussion: Increased online demand for a product or service — unless they exist in digital form, like movies or music — doesn’t necessarily translate into an equal and proportionate lack of interest for those same products or services in brick-and-mortar environments. There will always be those, for whatever the reason, who prefer to buy in one arena as opposed to the other. Just as there will always be those who likewise prefer to browse that way.

The implications for Amazon’s move into the luxury beauty market shape up more or less like this:

  1. 1.

    Price Is King

    Other than the convenience of one-stop and one-click shopping, one of the main reasons why people shop online is to reap cost savings. Consumers still tend to believe that online retailers can offer products at lower prices because those establishments do not have to bear unnecessary overhead costs related to keeping a live storefront presence. Even so, online sellers cannot escape the pricing wars that are common to brick-and-mortar retailers. Amazon, which is widely regarded as having just about everything in stock, could benefit from being the first place shoppers go when searching for the best price on a product they know they want and don’t want to waste time and effort obtaining. Which sort of amounts to the Wal-Mart factor, minus the ickiness of having it be known that you bought your $300 jar of facial cream there. Who’s going to know that you got the product from Amazon? Even the package delivery person, fresh from their latest round of live-insect fulfillment, probably won’t know what’s in that plain cardboard box. Unless, you know, you decide to flaunt it.

  2. 2.

    A Special Gift, Just for You

    Amazon is throwing in free samples of other luxury beauty products with certain purchases – an idea that might drum up additional business from consumers who buy on Amazon for the price (particularly of a tried-and-true item), but might be persuaded to purchase additional items once they’ve tried them out, risk-free. An added bonus: Customers can search on Amazon for those products that offer free samples with purchase. If one of your trusted brands pops up, why bother with a trip to that expensive (and fragrantly thick) cosmetic department all the way downtown?

  3. 3.

    Good Aspirations Pave the Road to Profit Heaven

    Another potential development, related somewhat to the first two, is the potential attraction of aspirational customers – those who’ve always wanted to dabble in luxury beauty products, but haven’t due to frugal budgets or consciences. How much easier is it to convince yourself to spend the extra money on pampering when there aren’t a hundred other people around who look like they can actually afford what you’ve only dreamed of spreading onto your cheekbones? You can sample what it’s like to appear like a queen, and for longer than a day, at a price point that might not be obtainable anywhere else. “As a matter of fact, yes I will try that flagon of musk oil that costs more per ounce than the 14K gold in my engagement ring. Half off the second flagon? Such a deal!”

  4. 4.

    All Within Reach…Almost

    By making the commitment to offer special deals on brands like Burberry, L’Occitane and Stila, Amazon may succeed in making common commodities out of products – and brands – that have long been viewed as out of reach for everyday consumers. That idea is bound to generate some mixed responses, both from brands and consumers. The net result, though, just might benefit both in the end. As long as “those people” don’t get above themselves and start searching Amazon for cut-rate prices on mansions in the Hamptons.

  5. 5.

    Stepping Up the E-Commerce Game

    Abundantly aware that the competition will likely emphasize the value of shopping for luxury beauty items in person, Amazon has made it as easy as possible for consumers to find what they’re looking for – among what the retailer calls “curated selections” — at a price they can afford. “Shoppers will also find more product information, visuals and editorial content to help with their purchasing decisions,” says a company spokeswoman. Indeed, a team of 12 beauty editors provide advice and tips to customers who need that extra reassurance or bit of information that often proves helpful in making cosmetic purchases in brick-and-mortar stores.

Stay the course, abandon ship – or full steam ahead?

Which brings us to what might be the most important aspect of Amazon’s luxury beauty kick off: How is the competition being affected? And, in turn, how will competitors respond?

It would be all but impossible for e-commerce beauty sites to ignore Amazon’s one-click pony. With Amazon’s prices lining up as comparable, in some cases, to online competitors like Sephora, the shopping landscape looks to see a few changes – most of which, if not all, will benefit the consumer, ever-more powerfully armed with the tools of technology.

Brands will need to work harder than before to remain engaged with consumers. Just because a brand is on Amazon doesn’t mean that core consumers will remain loyal, any more than people do when provided an infinitely greater array of choices of anything, especially when placed within reach of one’s fingertips. Luxury e-commerce sites will not only need to match or beat Amazon on price, but also when it comes to the online shopping experience. And brands will need to increasingly play up their particular cachet – what it is that makes them more desirable than their competitors – a factor that will also translate into enhanced customer service.

Why, after all, would you care that Lipstick A is said to be so much more high-class than Lipstick B when both are readily available on Amazon for practically the same price? With video reviews from experts drowning out the message about your brand’s critical distinctions?

It may not be on a playing field or at a time they’d prefer. But luxury beauty brands just might be forced to make an even stronger case for why they’re considered luxury. While exuding something of the common touch.

Which, at first glance, looks like another win for the consumer.

Image via Zhao / CC BY 2.0

Pierce Mattie

Pierce Mattie is a full-service marketing agency that interacts with consumers and key stakeholders at every stage of the journey. With a focus in beauty, health and wellness, we are immersed in the marketing landscape, able to powerfully communicate a brand’s point of difference to acquire and maintaining customers. The content team is obsessed with what's trending in the digital world, and how it intersects with consumer behavior. We are passionate about the changing landscape of the world, including how emergent technologies affect brand attachment, how diversity and inclusivity are critical to success, and where humans fit into the equation.

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