Amazon has bought a minority stake in luxury department store chain Neiman Marcus in a bid to expand its reach into more markets (via Engadget).
Despite revolutionizing e-commerce over the past two decades, Seattle-based Amazon has failed to break into the luxury goods sector, as evidenced by the wealth of data it can collect.
With this new strategic move, Amazon aims to leverage its data and logistics expertise to educate the luxury retailer while gaining greater insight into more spending patterns.
Amazon buys stake in Neiman Marcus
Saks Fifth Avenue and parent company Hudson’s Bay Company announced late last week the acquisition of Neiman Marcus for $2.65 (via The Wall Street JournalThe deal consolidates two of the largest US luxury retailers, while Amazon’s role as a minority investor is subject to regulatory approval.
If successful, Amazon will contribute to the deal by collecting and analyzing high-quality customer data, allowing it to provide a more personalized shopping experience and improved logistics. This is a setup that benefits both Amazon and the new owners of Naiman Marcus.
Amazon’s attempts to tap into the luxury market have been met with mixed reactions in the past, however. In 2016, LVMH argued that Amazon’s business was not a good fit for its own, adding that customers of high-end goods from brands like Louis Vuitton, Dior and Givenchy prefer to buy directly from their own stores or from certain resellers.
The size of Amazon’s stake has not yet been confirmed, but given that Neiman Marcus and Saks are expected to generate combined annual revenue of $10 billion, it could be a lucrative deal.
Amazon declined to comment further.