In a movie worth watching video which made waves this week, New York University marketing professor Scott Galloway sounded the alarm over Amazon, saying the online retail giant had become too powerful, destroying industries and stifling entrepreneurship.
“Amazon has become an invasive species that is unhealthy for our economy,” he proclaimed. “They can now perform Jedi mind tricks. He can put out a press release saying he’s looking into health care. No details on what that means… [Yet] the next morning, the health sector [loses] $31 million [in market value].”
Something similar just happened in our industry. Last month, news broke that Amazon had filed a trademark application for an online jewelry brand called For Keeps. Shortly after, Signet shares fell 3%; Tiffany’s, 1 percent. It’s not $31 million in market value. But it is something.
Of course, just because Amazon filed a trademark for a jewelry line doesn’t mean it will launch one.
Amazon is well aware “that media trolls [its] patents and then writes about it,” Galloway said. “Traditional media has been co-opted to become the investor relations department of Amazon and big tech.” He pointed out that the company previously filed patents for offbeat ideas like drone delivery, which got tons of media attention but never happened.
Punit Shah, marketing director of an e-tailer MyTrioRings.comwho sells on Amazon, thinks they have jewelry in their sights.
“Two vendors inside SEEPZ [Special Electronics Export Processing Zone] in Mumbai shared that they were contacted directly by Amazon,” he says. “In one case, they were asked to produce directly for an Amazon brand, and in another case, to recreate styles made by merchants like us already on their platform. Amazon is definitely planning to launch its own brand and has already made behind-the-scenes moves to line that up.
It’s no surprise that Amazon wants its own brand of jewelry. Its private label business has become one of its fastest growing categories, with a valued $7 billion in annual sales. Its in-house fashion lines performed particularly well; Thanks to them, Morgan Stanley believes Amazon will soon overtake Walmart as the largest clothing seller in the United States.
This won’t be the first time Amazon has targeted jewelry. She launched a jewelry division to much fanfare in 2004.
Monica Stephenson, owner of Anza Gems and consultant on this effort, was struck by the “analytical” character of the environment.
“Everything is based on data and information,” she says. “It’s a retail company, but it’s really a technology company.”
Although she is proud of what she and her team have accomplished, the end product has disappointed her.
“What I wanted it to look like and what it looked like was very different from what it ended up looking like. I wanted it to be beautiful, very organized, and more of an experience. They wanted SKUs and an emphasis on selection and price.
In the end, the company also didn’t seem impressed with the results and quickly moved on.
Shah, whose company once made 50% of its sales on Amazon but now does far less, says the site will once again find hard-to-break jewelry.
“They can’t scale the experience,” he says. “Millennials are looking for a unique experience that meets their individual needs and is memorable. »
Engagement ring buyers in particular like to have their hand held throughout the process. About 50% of new Blue Nile diamond customers call customer support. “We do about half of our business over the phone” noted former CEO Harvey Kanter.
Oded Edelman, leader of rival James Allen, called the service of its site “as warm as that of a store. We have excellent customer service representatives, and most customers call and talk to them for a long time. It’s not just about the ring. We get very personal with our customers. Some people talk about how they met their significant other.
This would never happen with Amazon, which doesn’t even advertise their customer service number. If you reach their representatives, they do not provide product information; there is too much.
Like Walmart, the retail giant it eclipses, Amazon is all about price and convenience. Push a button and the item arrives. Galloway calls it a “search engine with a warehouse attached”.
Yet sometimes consumers want more.
“There’s no room in Amazon’s model for touchscreen support or guided product discovery,” Shah says. “Couples need personalization, trials, rich media, unique payment options, and filters that can take their wedding date into account.”
Jewelry is, after all, an emotional product, and a recent Publish on Marketplace Pulse argued that Amazon never understood emotional selling.
“There is a difference between buying toilet paper and buying cosmetics,” writes Juozas Kaziukėnas. “One is transactional commerce, the other requires emotion. Many would say then that Amazon misses this. They do transactional commerce well but have no capacity for emotional brands.
In a fashion company articleveteran “retail prophet” Doug Stephens called it a possible Achilles’ heel.
“We, as human beings, don’t just shop for products. Not all the time anyway. We also shop to discover new things, socialize with friends and have fun. We buy for the thrill of the hunt and the dopamine rush associated with our brains when we find it. Amazon apparently has no interest in these less transactional items. Shopping on Amazon remains a solitary, static, brooding activity: a Sears catalog on digital steroids.
His private label push could also backfire, he argued, because Amazon uses data collected from other lines’ sales when launching its own.
“Brands [may] regularly defaulting to the search for less antagonistic partners. And without brands, Amazon ceases to be Amazon.
None of this means the industry shouldn’t pay attention to what the company is doing. Amazon remains the £800 electronic gorilla of retail – smart, powerful, well-managed and well-funded. “They can overwhelm any industry with cheap capital that no other company has received,” Galloway said.
National Jeweler estimates Amazon’s annual jewelry and watch sales are $800 million a year. Shah, however, thinks the real number is half that, or $400 million, still significant. It is clearly a player in the online watch industry, even though some of its products fall under the gray market. But the watches are well suited to the platform, as they are branded and standardized. Jewelry is less so.
Maybe that’s why he wants a jewelry brand. The proposed name, For Keeps, suggests an attempt to evoke Something. It’s reminiscent of Keepsake, but with an informal millennial twist. It certainly sounds better than her current brand of private label jewelry, the generic-sounding Amazon Collection.
Yet, at the end of the day, Amazon remains Amazon, for better or for worse.
“You go to Amazon for something you need, not something you want,” Shah explains. “How can you buy diamond jewelry from a page optimized to sell diapers, whey protein, and wall hooks?”
(Image courtesy of Amazon)
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