On an earlier episode of Recode Decode, hosted by Kara Swisher, guest Scott Galloway explained how Amazon can perform “Jedi mind tricks” on everyone else in commerce.
Well, make that almost everyone else.
“The race for the $50 order is over, it’s been won by Amazon,” 1stdibs CEO David Rosenblatt said on the latest episode of Recode Decode. “The race for the $5,000 order has not been won. You look at their average order value, their AOV, it’s not going to be $5,000. Whereas ours, we’re absolutely headed in that direction.”
1stdibs customers, a mixture of interior designers and wealthy collectors, are willing to spend that much because the site connects them with sellers who have extremely rare — sometimes one-of-a-kind — furniture, jewelry, art and fashion. Those sellers don’t want to do business with Bezos, Rosenblatt said.
“What makes the luxury business harder for Amazon to access than other industries?” he said. “It really has to do with the comfort level of the seller, with the environment in which they sell … There’s a reason you can’t buy Chanel in Target: Chanel doesn’t want to be there. And they’re never going to be there.”
On the new podcast, Rosenblatt also talked about how his company — which he describes as “eBay meets Sotheby’s” — is competing with the real Sotheby’s and other luxury auction houses. Although 1stdibs may seem niche to most people, there’s a $300 billion market ready to be disrupted, he said.
“Incumbents who have not taken digital threat or evolution seriously have done so at their own peril,” he said. “So far, we’ve seen that the incumbents in this industry have not reacted differently than in other industries, but we’ll see. That could change.”
“They hire a couple people who worked in internet companies, then they under-invest in that business and hope that somehow a combination of their brand name and their legacy assets with these people are going to produce a company that can compete effectively with native digital companies,” Rosenblatt added.
If you like this show, you should also sample our other podcasts:
- Recode Media with Peter Kafka features no-nonsense conversations with the smartest and most interesting people in the media world, with new episodes every Thursday. Use these links to subscribe on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.
- Too Embarrassed to Ask, hosted by Kara Swisher and The Verge’s Lauren Goode, answers the tech questions sent in by our readers and listeners. You can hear new episodes every Friday on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.
- And Recode Replay has all the audio from our live events, including the Code Conference, Code Media and the Code Commerce Series. Subscribe today on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.