Member Exclusive   //   February 15, 2024

Amazon Briefing: Why Amazon is turning to resale to build its luxury business

This is the latest installment of the Amazon Briefing, a weekly Modern Retail+ column about the ever-changing Amazon ecosystem. More from the series →

Amazon is increasingly adding luxury resale to its cart.

Earlier this month, Amazon partnered with the platform Hardly Ever Worn It, or HEWI, to sell pre-owned designer shoes, accessories, clothing and jewelry to customers in the U.K., Germany, Spain and Italy. HEWI, which launched in 2012, now has its own Amazon storefront under the Amazon Luxury Stores banner. Its items on Amazon include an £85 Tiffany scarf and a £26,250 Hermes bag.

Amazon’s new deal with HEWI builds on its ambitions in the luxury space. After launching its dedicated hub for luxury brands in 2020, Amazon more recently turned to resale as a way to get more luxury brands on the platform. In 2022, Amazon partnered with the vintage platform What Goes Around Comes Around, or WGACA, on a storefront in the U.S., listing “pre-loved” products from brands including Chanel, Gucci, Dior and Prada. Resale has proven to be a useful avenue for Amazon in terms of collecting data. It also allows Amazon to sell products from top brands and designers that may not want to list on Amazon on their own.

In an emailed statement to Modern Retail, Ruth Diaz, vice president of Amazon Fashion Europe, said, “We’re thrilled to expand our luxury offering with Hardly Ever Worn It this year to include more of our customers’ favourite brands and styles. We’re always looking to innovate and engage with our diverse customers, and launching pre-owned goods allows us to do just that, whilst also creating an opportunity for us to offer our customers accessible luxury.”

In 2020, Amazon made one its first big plays in the luxury space when it launched Luxury Stores in the U.S. as a way to sell ready-to-wear collections from designers such as Christopher Kane and Elie Saab. Its first brand partner was Oscar de la Renta, but other luxury players like LVMH and Kering held out from joining the vertical, as Glossy previously reported.

But, resale partnerships allow Amazon to sell more products from more brands and designers. In 2023, Rent the Runway came onto Amazon to sell brands like Diane von Furstenberg and Kate Spade, and Amazon’s deal with HEWI marks its first foray into luxury resale in Europe. Today, there are more than 80 brands listed under Amazon’s Luxury Stores in the United States and Europe, combined. Many of the most well-known brands — Chanel, Burberry and Balenciaga, for example — fall under “pre-loved” resale and are offered via WGACA and HEWI.

Today, luxury resale platforms are surging in size, scope and influence as consumers seek out ways to buy typically-expensive items at a discount. The luxury resale market was worth more than €30 billion in 2022, Bain estimated, and more players are getting into the space every year. HEWI sells to more than 40 markets and boasted more than 200,000 registered members as of 2022. The RealReal and Rebag opened more retail stores in 2022, while eBay began a luxury consignment business in December 2023.

Elaine Kwon, who managed luxury goods and accessories P&L at Amazon Fashion from 2014 to 2016, told Modern Retail that bringing individual luxury brands onto a platform like Amazon can be a “Sisyphean effort.” That’s where onboarding a secondhand partner like HEWI that already carries these brands can be helpful, Kwon, who is currently the managing partner and co-founder of the e-commerce agency Kwontified, said. “It allows Amazon not only to increase the number of unique products that it’s able to sell, but also the number of brands it’s able to tout and do it in a really efficient way,” she added.

Right now, many luxury brands don’t sell directly on Amazon. There could be several reasons for this, sources say, including that brands want to control margins or are wary of losing their exclusivity factor. By working with a platform like HEWI to sell these brands, though, Amazon gains valuable insight into the demand for them, Kwon pointed out. “They will be able to directly see how customers are shopping these items,” she explained. If Amazon wanted to go back to the brand, “they have something concrete that they can point to and say, ‘Hey, we actually could be a good partner for you.'”

Not all secondhand luxury platforms are interested in getting on Amazon, however. Fashionphile, which sold on eBay in the early 2000s before launching its website in 2007, decided against setting up shop on Amazon, its co-founder and president Sarah Davis told Modern Retail.

“With more and more players entering the space every day, selling online has become an extremely competitive and expensive place to do business in luxury resale,” Davis wrote in an email. “Ever since we got off eBay in those early years, we’ve focused on working as hard as we can to build a strong enough platform that we aren’t forced to share margin with anyone else in terms of fees or percentages to marketplaces.”

One of the challenges with resale is that there are only so many secondhand items up for grabs. So, with luxury resale, “if Amazon does decide to really push the button on this, it could start crowding out other players over time,” Neil Saunders, managing director of GlobalData Retail, told Modern Retail. “I don’t think it will do it immediately… but certainly, Amazon could be very disruptive as it enters this market.”

Amazon is already making inroads in the larger fashion business. In 2021, Amazon unseated Walmart as the top apparel retailer in the U.S., in large part due to the pandemic, Wells Fargo calculated. Yet, there are signs that Amazon has progress to make. In 2022, Amazon introduced Style stores, a fleet of physical clothing stores, but ended up closing them some 17 months later, at the end of 2023. Its apparel strategy now largely focuses on digital.

Today, 20% of products listed on Amazon belong to the clothing, shoes and jewelry category, per Jungle Scout’s 2024 State of the Amazon Seller report. Even if many luxury brands aren’t ready to sell on Amazon just yet, there are plenty of apparel brands eager to tap into the volume of sales being done on Amazon.

Dearfoams, a slippers and shoes brand, considers Amazon its biggest e-commerce business over its website, Walmart and Target, Joe Bean, head of sales for Dearfoams, told Modern Retail. “We have continuous growth on Amazon,” he said. “I think more people are realizing the convenience of shopping online and leaning into that.”

People have become accustomed to buying new and used apparel and footwear online, and luxury resale should be no different, GlobalData Retail’s Saunders said. “I do think people will buy luxury goods on Amazon,” he said. “I think people are very agnostic when it comes to where they get things from. The only consideration they have is, ‘Is the site reputable? Am I likely to get this product? And is the product genuine?’ And actually, I think Amazon has an advantage here because it gives customers peace of mind.”

Amazon news to know

  • Amazon is facing a class-action lawsuit in California over turning on ads for Amazon Prime users, then charging them an additional fee for an ad-free experience.
  • A different lawsuit alleges that Amazon caused hundreds of millions of customers to overpay for items when using Amazon’s “Buy Box.”
  • Jeff Bezos sold $2 billion worth of Amazon stock last week, the first time he’s sold shares since 2021.

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