How Amazon's New High-End Beauty Shop Takes Away a Luxury

SAN DIEGO ( TheStreet) -- Amazon ( AMZN) has launched a luxury beauty store offering thousands of high-end products including makeup, skin care and hair care from brands such as NARS, Dr. Brandt, Jack Black and Deborah Lippmann.

"We know that our beauty customers are searching for luxury brands on Amazon. We've worked hard to create a single destination that showcases luxury beauty collections and makes it easier than ever for customers to explore these brands, follow trends and develop their beauty regimens," Amazon's Chance Wales, director of beauty and health & personal care, said in a press release. "We'll continue to build on this experience by adding new features and selection for our customers."

The new store has an upscale fashion magazine look and feel, including editor's tips, beauty awards and how-tos along with detailed product information.

Shoppers can browse beauty products by category, such as makeup, nails, fragrance, hair care or men's grooming, and by brand, collection, color, gender, skin care need, as well as by those giving free samples with a purchase, editor's picks or by "trend" -- such things as "lush lashes," "metallic nails," "dewy skin" or "smoldering eyes."

And of course there's free Super Saver shipping or free two-day shipping with Amazon Prime.

E-commerce analysts say the store has a variety of benefits for consumers who are already familiar with a particular luxury beauty product and don't need to go into a store to smell a fragrance, sample a lip color or try on that new blush.

"For someone who already knows the product, why go to the Neiman or Saks websites, which are going to charge you for shipping?" says Chris Hauca, managing director at Acquity Group, an e-commerce and digital marketing company with a recent study about online luxury shopping trends. "Especially when I know if I buy one of these items from Amazon, I will get it when Amazon said I'm going to get it. 'I need this, I just ran out, I know I can get it from Amazon tomorrow.'"

Joelle Kaufman, of BloomReach, a data marketing company that specializes in increasing e-commerce revenue, also believes the odds of someone trying a beauty product for the first time via an online purchase are very slim.

"People will go to Amazon to buy something that they already regularly buy, because it's convenient -- 'I don't need to go into the store to get my hand cream. It would be very nice for it to just show up at my house, so I'm going to replenish it through Amazon.' And Amazon is perfectly happy for me to do that," Kaufman says. "But what I won't do on Amazon is, I'm not going to discover a new product on Amazon."

Hauca and Kaufman say the new store is a smart move on Amazon's part and undoubtedly data driven. According to Acquity Group's study, 6.8% of smartphone owners buy luxury goods online two or more times per month -- but 59.4% of participants in the study say they would never consider it, giving Amazon plenty of room to grow in the segment.

The question is whether it is also a smart move for the luxury brands now being sold by Amazon, where the experience could detract from an upscale brand's exclusive feel and cache.

"When I look at this, it goes against most things you expect a luxury brand to be, including being enveloped in the brand," Hauca says. "I think in some regards it will degrade it, seeing these brands on here. You don't see Chanel on here, or some of these other high-end perfumes or beauty items. It's a kind of a mixed bag. It takes a little bit away from the luxury. "

"It's not that Amazon necessarily wants to be in luxury. They want to be able to sell everything to everybody," Hauca says. "One of the stores they opened late last year was Amazon Industrial Supply -- it's an Amazon store tied to people who are building things on an assembly line. Now you've got the opposite end of spectrum in luxury beauty. Amazon doesn't look for a new market they will compete in; they look for markets they will disrupt and gain an edge."

Adds Kaufman: "Amazon is no threat to NARS because Amazon is a channel for NARS to reach their customers, and it's a very big channel. However, if by being in that channel, if everyone decides NARS is not that special anymore, then NARS may have to do more ...That's the calculus... And retailers that sell these luxury products may need to think about what experience they can offer the consumer that is not about simply replenishing stock but is about luxury and about being taken care of."

The e-commerce giant declined offer an executive to be interviewed about the launch.

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