Amazon has a winning formula with its new limited sale venture - a site that has an "invite only" quality to it, but everyone who uses Amazon is invited.
Amazon.com just launched a luxury limited sale website called MyHabit.com. It competes with sites like Gilt and other limited sale sites.
While one can only speculate what Amazon's strategy is here, there are a few things worth pointing out about the new endeavor.
Back to Basics
While Amazon had fairly humble beginnings, its "everything for everyone" approach meant that its site soon grew to epic proportions, as did the feature on each page, and the convolution of its interactive architecture. Amazon's site is anything but simple. That's why it's so refreshing to see an Amazon-based project that goes back to basics. MyHabit is a simple site. It reminds me of the kinds of sites we would have designed years ago.
But, simple is always better than complex, and Amazon has a winning formula. It has a site that has an "invite only" quality to it, but everyone who uses Amazon (i.e., the entire world) is invited.
While a site like this could hardly be called innovative, it is innovative for Amazon because it is designing small. Amazon isn't thinking small, though. If this boutique site catches on (and given the enormous number of people it can pump into this site, it should), it opens the door for Amazon to venture into any number of vertical markets whose products wouldn't fit comfortably on Amazon.com, or whose products are ready to be liquidated (without devaluing the brand). Luxury is an obvious vertical to try this out on, as it is the least Amazon-like vertical. It's selective and not for the masses. Amazon is for the masses.
The user experience itself is fairly basic. The one nice thing the site does is use actual video of models wearing clothes. This is not something you would typically see in the "flash sale" business model because the inventory is fleeting and the photography is expensive. But, if anyone can afford to do it, Amazon can.
You might remember that H&M did a cooler version of this one and a half years ago with its fall collection. The clothing company not only had video for its fall campaign, it had super slow-motion video. The effect was that you thought it was just a photo, and then the photo would move ever so slowly. It was stunning.
Having said that, Amazon's use of video on this site is great, and I am eager to see other retails figure out an economy of scale to make this kind of dynamic presentation more standard.
So What Does It Mean?
While it is too early to tell if MyHabit.com is simply the first of many boutique sites Amazon will launch, it is an easy bet that it is. While this might be good news to consumers, it should be a cause for concern for other retailers. The message is that Amazon is experimenting with other business models. Of course, Amazon has done this before, but generally they are all centered around Amazon.com (such as vendor stores). But this is a different animal, as Amazon is creating new brands to compete in these different business models. Even if your company did it first, Amazon has the traffic and membership to not only steal your business model, but immediately grow its economy of scale.
What do you think? Leave your comments below.
Until next time...
Jack Aaronson, CEO of The Aaronson Group and corporate lecturer, is a sought-after expert on enhanced user experiences, customer conversion, retention, and loyalty. If only a small percentage of people who arrive at your home page transact with your company (and even fewer return to transact again), Jack and his company can help. He also publishes a newsletter about multichannel marketing, personalization, user experience, and other related issues. He has keynoted most major marketing conferences around the world and regularly speaks at Shop.org and other major industry shows. You can learn more about Jack through his LinkedIn profile.
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