Can an online retailer successfully break into the high fashion market?

A new partnership between online retail giant Amazon and luxury department store Saks Fifth Avenue may prove pivotal for Amazon as it looks to penetrate the high-end fashion segment. Yet, despite a flashy promotional video featuring handbags suspended from umbrellas on the Saks Amazon storefront, and the fact that traditional department stores have been struggling for years to stay competitive with e-commerce platforms, the partnership does not necessarily guarantee smooth sailing.

In fact, according to research from University of Rhode Island professor Ji Hye Kang, people are more inclined to express favorable opinions about a garment purchased from a traditional department store like Macy’s than the same item sold on an online platform.

“I think before the pandemic none of us thought Amazon could be successful as a fashion retailer,” said Kang, who is chair of URI’s Department of Textiles, Fashion Merchandising and Design. “They were struggling to change their customer’s perception that Amazon is a place for fashion purchases.”

It’s a perception that persists today. By analyzing more than 100,000 customer reviews of identical products sold on Amazon and at Macy’s, collected through web crawling and scraping programs, Kang compared feedback on 21 items: six pairs of men’s jeans and 15 women’s bras that were available through both retailers. She found that consumers perceived identical products differently depending on the retailer.

Over the years, Amazon has tried to change its image through acquisitions, including Zappos in 2009 and Endless in 2012. And while its apparel and accessories revenue have surged to approximately $64 billion annually, Kang’s findings, published in the Australasian Marketing Journal, indicate that Amazon continues to grapple with the challenge of attracting prestigious fashion labels and cultivating an image of sophistication.

According to Kang, a major issue for Amazon lies in the fact that it has no history in high fashion, and customers still perceive it as a general retailer.

Based on her research, Kang said customers believe “that Macy’s is a more fashion-forward and fashion-oriented retailer.”

More than that, her analysis revealed that customers were more likely to leave positive reviews on Macy’s website than on Amazon’s for identical products. What stood out to her were the opposing attributes assigned by the reviews to each retailer. Customers spoke positively of Macy’s, praising the products’ comfort and showing brand loyalty, whereas reviews of the same products on Amazon frequently cited concerns about quality assurance issues and sizing inconsistencies.

Despite Amazon investing in reliable third-party vendors to help ward against counterfeiting or knock-off items, Kang notes, “A lot of consumers and my students do not want to buy fashionable items from Amazon because of the authenticity.”

Kang’s research offers several strategic recommendations, one of which Amazon appears to be implementing through the dedicated page that features Saks Fifth Avenue merchandise.

“Amazon can be more proactive,” says Kang. “They can make a distinctive section on their website that’s dedicated to luxury brands; that way they can put all the luxury brands there and have them separated from more common products.”

She acknowledges, however, the advantage that traditional brick and mortar department stores have—which they may or may not be effectively capitalizing on. Kang says the fact that they have fitting rooms and a presence in the community enables them to lean into the customer experience, which can help to mitigate negative experiences customers may have post purchase.

According to the study, “Macy’s can lead their consumers to adopt heuristic evaluation processes and maintain a high level of customer satisfaction.”