The coronavirus pandemic has given Amazon the perfect opportunity to swoop in on the $300 billion global luxury market

• Amazon has been trying to break into the $300 billion global luxury market for some time.
• This week, it made a breakthrough by partnering with Vogue to launch a digital storefront on its site selling products from independent designers.
• Experts say the pandemic has given Amazon the chance to swoop in on the luxury industry as brands continued to be battered by the effects of the crisis.
• Visit Business Insider's homepage for more stories.

Amazon has had its sites set on the $300 billion global luxury market for some time but working out how to become a world-class luxury retailer and convincing designer brands to come onto its platform has proven to be highly problematic for "The Everything Store."

On Thursday, it made a major breakthrough in its quest to move into luxury fashion, partnering with Vogue and the Council of Fashion Designers of America to launch a digital storefront that allows its customers to buy luxury goods from independent designers such as Philip Lim and Batsheva on the site.

Amazon was praised by Vogue's renowned editor in chief Anna Wintour for its "generous support" (it donated $500,000 to designers impacted by the pandemic) and for quickly sharing its resources "to aid American designers."

Experts say this shouldn't be viewed as a purely altruistic move, however, as this may have pushed the retail giant one step further in gaining more credibility in the fashion world.

Moreover, these experts say that the coronavirus pandemic has created a unique situation for Amazon, which puts it in a prime position to swoop in on the luxury market.

'One more inch forward in that pursuit of luxury'

"As a PR play it is genius," Doug Stephens, a retail industry expert and founder of website Retail Prophet, said in a recent conversation with Business Insider.

Amazon "can foster relationships with these designers and show in at least a preliminary sense what a designer offering on Amazon could look," he said. "It also establishes goodwill with the fashion community and to have someone like Anna Wintour as the PR face of this thing is a great representation for Amazon.

It "gets them one more inch forward in that pursuit of luxury," he said.

Luxury fashion and fashion, in general, are one of the few areas that Amazon has been unable to establish its presence, despite its efforts to double down on this. While it's considered to be the top apparel seller in the US, alongside Walmart, the majority of its sales are from basics, and it has struggled to catch on in the eyes of the customer as a place to shop for more fashionable items.

This is an image that it's been trying to shake off for some time. In an effort to do so, it's launched more fashion-focused concepts, acquired trendy companies such as women's clothing site Shopbop and online shoe seller Zappos, and brought new brands onto its site.

But experts say the shopping experience on Amazon's site hasn't traditionally lent itself well to fashion shopping and it hasn't had success in creating an inspiring place to browse and shop for clothes.

"People aren't inspired to discover, they are looking for efficiency," Joaquin Villalba, CEO of Nextail and former head of European logistics for Inditex, recently told Business Insider, adding that the shopping experience on Amazon is "dry."

"Amazon tends to be a very cognitively driven website and very antiseptic in character and quality," Stephens said in a conversation with Business Insider earlier this year.

The prevalence of counterfeit products has also played a role in deterring brands from joining its site, something that is of the utmost importance to luxury brands especially.

But circumstances have vastly changed and in light of the pandemic, some of these brands may be reconsidering a partnership with Amazon.

"Many of these brands are potentially looking at 12 to 18 months, or maybe longer, where they are going to have to run their operations in a very restrictive way; many of these stores don't have a fully-fledged e-commerce or direct-to-consumer strategy (in some cases they have none) so might be looking at Amazon in a new light," Stephens said.

He put it another way: "Amazon has always been viewed as a hostile port; if you had to bring your ship in, Amazon was not the port that you wanted to steer in to but the waters out there on the open seas right now are so turbulent and so chaotic that Amazon looks a lot safer than it might have been a few months ago."

One of the biggest considerations for these brands is how their products will look on the site.

Stephens said that if Amazon can address this and create a more luxury-focused storefront, he would not be inconceivable that bring bigger status names could come on board. He specifically called out Dior, Chanel, and Prada as examples.

Bernstein analyst Luca Solca echoed these thoughts in an email to Business Insider.

"Vogue has editorial content in spades – which seems to be largely missing from the digital retail concepts currently present in the high-end fashion market, such as Farfetch. If Amazon was to offer e-concessions and blend the Vogue editorial content in its proposition, it would probably become a force to be reckoned with," he said.

"High-end brands will care about two things: control on pricing, and a guarantee of good neighbors," he said – the more brands that it can get on board, the more likely it is that others will join, therefore.

"If you were sit down and create a crisis that plays into Amazon's hands, this would be it, you'd be hard-pressed to come up with anything that better suited them but right now," Stephens said.

He continued: "Amazon is going to use this period of time to reinvent the concept of shopping online. I do not think that Bezos is going to sit idly by and watch the rest of the industry catch up to them – whatever he needs to do to get luxury on his platform, he is going to do it."

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