INDUSTRY

Putting the fire into Amazon's private brands

When shopping on Amazon, I’ve never really noticed its private brands - apart from perhaps AmazonBasics and the Echo and Fire devices. That probably says more about my shopping habits than anything else! I don’t really buy much from Amazon, I’m more of an Amazon window shopper; Amazon is my price comparison tool of choice.

Lately, however, I have a new-found awareness of Amazon brands. Will this encourage me to part with my money there more often? Will I stop browsing and actually start buying things other than those addictive Alexa-enabled devices?

Amazon already has approximately 140 private brands, most of which I don’t immediately recognize as Amazon brands, and many that I didn’t even know were private brands. Amazon has done a great job of sneaking brands under my radar and into my suggestions.

Amazon isn’t currently a name that I would go to for all products I want to buy. This is because I don’t consider them as meeting the same high standards as Walmart, Target or Kroger. These are stores where I recognize the brands, I trust them, and I know exactly what I expect from them quality-wise. I have already formed brand loyalty to several supermarket private brands.

Then there is the question of whether I see Amazon as a store or a marketplace. How would I feel if Amazon recommended its own private brand products as alternatives to a product I’m currently viewing? Back in March, the Wall Street Journal reported on Amazon’s pop-up ad experiment that did exactly that. This leaves me wondering if I like this kind of product placement. The fact that I even question that is a little surprising, since brick and motor retail stores have placed their private brands next to national brands for years, and this I find totally acceptable. However, I am now trying to let go of my current brand loyalty, and also trying to see Amazon in a different light.

With all this said, I wasn’t too surprised to read an article on Bloomberg quoting “Most Amazon brands are duds, not disruptors.” Amazon has many advantages over traditional retailers, including granular shopper data, search prioritization, etc. but that doesn’t mean it will see an automatic win for all categories.

“The popular narrative has been that by utilizing internal data, Amazon can launch its brands in many categories and capture most of the category’s sales,” Marketplace Pulse said in its report. “So far there is no evidence of this working.”

Certainly, I believe that regardless of how much market share and advertising power Amazon has, creating high quality private brands takes time and crucially, collaboration with the suppliers that make the products.

Amazon has so much information at its fingertips. Consolidating quality metrics such as returns data, online ratings, reviews and social media feedback - and then sharing this data with suppliers - will enable Amazon to evolve products that delight the customer. Suppliers need to be held accountable for quality issues but they also need to be supported, so that they understand what is expected of them and how they can meet Amazon’s standards.

It’s this collaboration with suppliers that will facilitate the creation of innovative products that can ultimately disrupt the industry.

At some point I will no doubt purchase an Amazon brand grocery item, and it has to be good. A first experience with any product for any brand forms lasting opinions. I’ve said this in my previous articles, and I’ll say it again – product is king! Regardless of the existing brand reputation and reach, if Amazon’s products aren’t good, people won’t buy them.

For Amazon, certain categories will be much easier to execute successfully online than others. Some products I want to see, touch, and on occasions smell, in-store, before I buy. I walk past store brands each day and I’m seeing them mature, develop and improve until nowadays I’m reaching out for that Marketside pizza instead of the usual DiGiorno. It will be interesting to see what success Amazon has with private brand grocery vs. non-food.

 

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