Less than 3 years ago, I sat in Tribeca with a perfectly frothed cappuccino in hand. Although my need for caffeine trumps most other needs in this life, I struggled to keep the coffee from spilling onto the white tablecloth as I waved my hands in a spirited debate with a luxury retailer colleague of mine. She was adamant that she didn’t – and would never - compete with Amazon. I argued that she would. And in fact, she already did.

Fast forward to this past November, when we sat a few blocks away, and the conversation had shifted quite drastically. Although my brilliant and talented friend still maintains tight control of her product distribution (brand site and exclusive department stores) and won’t “water down” her brand by selling on Amazon, her entire organization and the luxury retail industry as a whole is struggling to compete against Amazon’s omnipresence. From the algorithms that create personalized experiences for shoppers to the pure ease of consumer spending, luxury retailers woke up one day to find themselves competing against a foe they had long refused to acknowledge. For a consumer, a similar handbag will suffice when it can be ordered alongside 3 other non-related products and arrive the next day with no shipping costs. No hassles on returns. No barriers to buy. Or a shopper can click right over to Shopbop and receive Amazon Prime shipping on brands ranging from Temperley London to Stella McCartney to Alexander Wang.

In Hiroko Tabuchi's article in The New York Times, entitled "It's Amazon and Also-Rans in Retailers' Race for Online Sales," it is revealed that Amazon "...steamrolled through 2015, capturing an ever-growing share of United States retail sales. Of every additional $1 Americans spent for items online this year, Amazon captured 51 cents, according to a recent estimate by analysts at Macquarie Research.

And of the expected $94 billion growth in all retail sales this year — both in stores and online — Amazon took a staggering $22 billion..."

Although the article goes on to state that luxury is an area in which Amazon “has little presence,” luxury retailers are realizing that the amount of money an affluent or aspirational consumer will spend is indeed finite. And that the dollar they may have parted with in the past within the esteemed walls of a luxury store, or on the brand’s website, is now being chipped away at by Amazon.

Great luxury retailers are finding new ways to reach, convert and create long term relationships with shoppers - putting in place in their organizations the people, the processes and the technology to stay a step ahead of their customers' ever heightening expectations. But they are also taking a fresh look at their competitive set and realizing that there is a tougher battle than ever before to earn their share of what they hope is the consumer’s genuine leather, limited edition, logo-bearing wallet.