December 1, 1999
Amazon Teams with Ashford
The on-line bookstore that took the Internet by storm will now market fine jewelry and other luxury goods thanks to a deal with e-tailer Ashford.com.
Amazon.com, Seattle, WA, will invest $10 million in Ashford.com to hold a 16.6% stake in the company. In turn, Ashford will market its $200 billion in luxury consumer goods to Amazon's 13 million customers. A button linking to Ashford's site will go live on Amazon.com today.
In addition to being a retail "partner" on Amazon, Ashford will take advantage of Amazon's customer database to actively reach potential customers, Ashford CEO Kenny Kurtzman told Professional Jeweler. "We'll be mining the customer database and identify those customers most likely to buy luxury goods," Kurtzman said. "Every time they order a book from Amazon, they'll get a coupon for Ashford.com." Ashford will also use e-mail and direct mail to market to these consumers.
Ashford.com sells 12,000 watches, jewelry items, accessories, fragrances, ties, scarves and writing instruments on its site. It recently signed a deal with 25 International Jewelry Design Guild designers to build an on-line jewelry boutique and was named one of the top 500 highest-earning e-commerce sites by Interactive Week magazine. Ashford.com earned $4.4 million last quarter, and analysts project earnings of $15 million for the fourth quarter, an estimate with which Kurtzman said he feels comfortable.
"We've seen traffic increase dramatically this year, about six to 10 times higher compared to last holiday season," Kurtzman said. "We actually had a great day on Thanksgiving Day. The stores were closed, but people waiting for the turkey to cook were shopping on-line."
Amazon's move into luxury products is significant in the competitive game of on-line retailing. Rich Goldstein of iJeweler, Austin, TX told jewelers at the Polygon Internet Conclave in August that Amazon introduced a short-lived "Gifts" section early in 1999, managing to sell some fine jewelry before discontinuing the venture. "They're staking out territory, and if they do start selling jewelry, they're a major force to be reckoned with," he said.
- by Stacey King