Amazon's First Popup Shop Challenges Luxury Brands

E-commerce giant Amazon is investing in the fashion and luxury sectors and aims to dominate market share. Amazon already accounts for nearly half of all online purchases in the United States, and with their purchase of Wholefoods last year, Amazon ventured into physical stores and has now opened its first pop-up shop on Baker Street in London.

Luxury brands have long held the advantage of crafting a high-end customer experience in-store, and in spite of the sustained growth of shoppers preferring to place their orders online, luxury brand numbers of in-store visits have actually increased forty percent over the past three years, according to PwC’s Global Consumer Insights Survey. Yet attracting these customers means luxury retailers have made significant investments into curating bigger and better experiences for customers to buy into, in addition to the actual products, by turning their shops into restaurants, spas, and galleries. Amazon has been paying attention, offering live music, free makeovers, a beauty panel, juice bars, and yoga classes during their week-long pop-up on Baker Street. A recent survey by Swedish bank Klarna surveyed two thousand shoppers, of whom 31 percent said they like to make purchases after they have left the store, where 61 percent said they find e-commerce to be tedious without allowing them to touch or see items.

Amazon Go stores in the United States have no cashiers nor checkouts. Customers walk in, pick something off a shelf, and walk out because thousands of sensors monitor each item and automatically bill the customer’s Amazon account. Amazon plans to rollout more of these stores in the U.S. and into the U.K. In the pop-up shop, Amazon Fire Tablets were held by assistants who could scan, view, compare, and purchase every product online; items could only be bought in the pop-up shop through the app.

Amazon has launched five of its own fashion labels within the past year, all of which were on display in its pop-up. Amazon owns a photo studio in Shoreditch, another trendy part of London, where stylists and photographers take over half a million images a year for its website.