Amazon has purchased a minority stake in US luxury department store chain Neiman Marcus in a bid to expand its reach into more markets.
Despite revolutionizing ecommerce over the course of around two decades, Amazon has failed to penetrate the luxury goods sector highlighting extensive data that the company is set to be able to collect.
With the new strategic move, Amazon aims to leverage its data and logistics expertise to bring the luxury retailer up to speed while gaining greater insight into more spending habits.
Amazon buys stake in Neiman Marcus
Saks Fifth Avenue and its parent company Hudson’s Bay Company announced the $2.65 acquisition of Neiman Marcus late last week (via The Wall Street Journal). The deal consolidates two of the largest US luxury retailers, while Amazon’s role as a minority investor pends regulatory approval.
If successful, Amazon is set to contribute to the deal by gathering and analyzing high-quality customer data to offer more personalized shopping experiences and enhanced logistics in a setup set to benefit both it and Naiman Marcus’s new owners.
However, Amazon’s efforts to tap into the luxury market have been met with mixed reviews in the past. In 2016, LVMH stated that Amazon’s business did not fit its own, adding that customers of high-end goods from the likes of Louis Vuitton, Dior and Givenchy prefer to buy directly from their own stores or from certain resellers.
The size of Amazon’s stake remains unconfirmed, however with Neiman Marcus and Saks expected to generate $10 billion in combined annual sales, it could prove a lucrative deal.
Amazon declined to add any further comment.
Via Engadget