That viral Tik-Tok video of a man using rice to represent Jeff Bezos’s wealth needs a little updating now. In the video, each grain of rice was “worth” $100,000, and to get to Bezos’s worth, well, there was a full table of rice--some 58 pounds of future risoto.
The video was made in February when the Amazon founder had a fortune of $122 billion. As of today, it’s grown to $200.4 billion, the highest number Forbes magazine has recorded in 40 years of tracking billionaires.
With the updated wealth, the gap between Bezos and the world’s second-richest person, Bill Gates, has grown to $83.8 billion. The third on the list, Bernard Arnault, is worth $114 billion.
It is evident that Bezos and Amazon have made a killing during the pandemic, but they aren’t alone. So far, billionaires in the United States alone have increased their total net worth by $637 billion.
And the next money Amazon is looking to make will come from the luxury-during-a-pandemic corner.
According to various media reports, Amazon is launching a luxury fashion site next month and is expected to feature a dozen American and European brands even though Amazon has not confirmed the labels that are set to join the platform. In fact, Amazon has remained rather quiet about the whole thing.
Over the past few years, Amazon has ramped up its efforts to become a bigger player in the fashion space and has so far has made two successful acquisitions in that industry: Zappos and Shopbop.
WWD reports there is a $100-million marketing campaign in development and a warehouse is being built in Arizona to accommodate the project. The news provider claims that Amazon originally planned to unveil the concessions-based luxury platform in the spring, but postponed the launch due to the pandemic.
Since January, the retail sector has been among the hardest hit, with sales declining 36.5%.
Even the ones that are financially stable are looking to downsize their brick-and-mortar store presence and move to the e-commerce sphere.
Several luxury brands are suing landlords to break their leases. The Italian fashion brand Valentino is suing its landlord, hoping to break its lease on NYC’s Fifth Avenue early. Victoria’s Secret is also seeking to annul one of its largest and most expensive retail leases in Manhattan’s Herald Square.
So, luxury brands are in trouble, and Amazon may be their key to survival, but questions remain, including how Amazon will handle the ever-important “exclusive” relationships with luxury customers, who may need more customer service than your average Amazon shopper. If they’re used to boutique service, will they settle for an impersonal online setup?
An article in Forbes also questions Amazon’s problem with knock-off goods, noting that fraudsters will be all over this because of the high margins in the luxury business. One fake could send the whole house of cards crashing down.
But there’s probably no better time than the present for Amazon to make this move. It’s prime time to throw a lifeline to the luxury goods segment.
By Fred Dunkley for Safehaven.com