Amazon was long rejected by luxury beauty brands who achieved their luster through rarified exclusivity in the retail environment. But the growth of digital retail changed many minds in the executive ranks at beauty companies inspiring a new mode of operating at the highest ranks of luxury beauty.
And when we talk about digital and e-commerce, it’s impossible to avoid the topic of Amazon. Amazon is so important, it turns out, that many companies are hiring executives to focus solely on the platform.
How the Pandemic Forced Luxury Beauty Brands to Embrace Amazon
What changed in luxury beauty and retail to make companies get serious about Amazon? The pandemic taught luxury sellers the power of the “lipstick effect,” that is, customers are happy to add in a small luxury item or two into a more quotidian purchase of groceries or toilet paper if it gave them a brief hit of dopamine.
Wanting to capitalize on that opportunity are an increasing number of luxury beauty retailers. What’s more, as they see Chanel and Dior sell directly on Amazon, they don’t want to miss out on a piece of the pie.
“Brand-Gating” on Amazon for Luxury Beauty Products
Amazon has a “Premium Beauty” tier that is offered to select luxury brands. This designation allows brands like Dior or Chanel to “brand gate” or prohibit third-party sellers from offering their products at a discount or from selling expired or otherwise compromised products. It’s one of the incentives Amazon offers brands to work with the e-tail giant.
Dealing with the dreaded Amazon private label products
Along with opportunities, Amazon is rife with challenges as well. Amazon can be a cutthroat marketplace for luxury beauty brands, especially because of Amazon’s aggressive approach to offering its own private label products at a steep discount. Luxury beauty brand managers need to excel at differentiating their products in this unique environment.
The Digital Skills Baseline for Luxury Retail
When selling online, beauty brands rely on executive talent that has a keen understanding of creating an immersive retail experience through the web. Typically that means the know-how to create branded destinations on the web, and the technical savvy to track the customer journey from consideration to research to purchase and follow-up. Drilling down even further, these executives may have expertise in search engine optimization (SEO), paid ad placement, analytics or newsletter marketing.
Unique Skills Needed for Beauty Executives working with Amazon
Compared to all of those fine distinctions mentioned above, Amazon can be a little bit of a black box compared to the analytics offered by Facebook, Google and newsletter platforms, which allow you insight on who is looking, buying and what sorts of behaviors they engage in while browsing your product.
While Amazon is the third largest advertising platform on the web behind Facebook and Google, it keeps many of the secrets of its algorithm under wraps, demanding a particular set of creative skills from executives from beauty brands planning to leverage the e-commerce giant. These include:
- Eagle eyes for spotting potential counterfeit items and third party sellers horning in on their turf.
- Ability to generate review traffic for new product launches — this is the coin of the realm for showing up in the Amazon search algorithm and getting them can be particularly challenging during a brand launch.
- Ideas for creating channel specific promotions and exclusive offers.
- Content strategy ideas, especially for video, that will help customers learn about and better use their products.