Get a demo Do I subscribe? News sign-up
Print

Amazon to expand private label

News, 17 May 2016

NEW YORK: Amazon, the online retailing giant, is reported to be set to make a significant push into offering private-label products, with perishable foods and household products possibly available within weeks.

According to the Wall Street Journal, the former will include nuts, spices, tea, coffee, baby food and vitamins, while the latter will embrace diapers and laundry detergents.

The Journal's sources indicated that the Happy Belly name would be applied to foodstuffs, the Wickedly Prime brand to snack foods, Mama Bear to baby products and Presto! to household products.

"Amazon is 'carpet-bombing' the market with new products," said Bill Bishop, chief architect of brand consultancy Brick Meets Click. "Private label allows them to test out new prices and distinctive flavours with less risk."

He added that the retailers' data could help it predict more accurately what products are likely to sell best to its customers.

Amazon's latest private label brands will only be offered to Amazon Prime members, who already spend more than non-members and are more loyal.

The move into private label foodstuffs may also give a boost to AmazonFresh, the retailer's grocery delivery business, which has slowly expanded to half a dozen US cities in the past few years and for which it is now demanding a $299 annual membership fee.

Recode noted that that Amazon's move was rather more than just another retailer pushing its in-house brands and had implications for mainstream brands.

"That's because the growth in retail is all going to be online, and Amazon owns online," it said. "So Amazon's move into consumer packaged goods gives it even more opportunity to flex its muscle with suppliers. That means giving its own products better placement on its site and undercutting competitors on pricing."

Data sourced from Wall Street Journal, Recode; additional content by Warc staff