Report: Amazon’s private-label lines are forces to be reckoned with
Amazon is synonymous for stealing marketshare from established retail brands. Now it upping the ante with private-label merchandise.
By leveraging its online shelf space to introduce its own line of new private-label products, Amazon is changing the dynamic in the marketplace once again, according to a report by 1010data Market Insights. This time among category leaders, as Amazon’s private label line directly competes with national suppliers.
“No matter the market, the challenge for brands in an increasing number of categories is that Amazon is the top online channel,” said Jed Alpert, senior VP of marketing at 1010data. “Amazon is leveraging its dominance to sell its own private-label brands, which compete with traditional suppliers.”
Not only is Amazon heavily competing with category leaders, but in certain cases, commanding its online categories. This was revealed in analysis from 1010data Market Insights, which researched sales trends from September 2015 to August 2016 among three key online categories — batteries, baby wipes and speakers.
Findings revealed that Amazon is excelling as it competes with self-named lines across each category.
For example, 94% of all batteries sold online are sold through Amazon sites. When diving deeper however, the AmazonBasics brand accrued approximately $113 million in online battery sales were this past year.
Called AmazonBasics, the line is among the top 10 battery brands, and it accounts for about one-third of battery sales online, boasting 93% of year-over-year (YOY) growth. With an online conversion rate that is 1.5 times greater than the category average, consumers are more likely to buy Amazon batteries once they view them online, research revealed.
There is a similar story across the baby wipes category. At the end of 2014, Amazon introduced Amazon Elements, a line that includes baby wipes and is exclusive to Amazon Prime members.
Despite the limited audience, Amazon Elements has a 16% market share — and is considered one of the top brands online for baby wipes — based on total dollars sold among the top 10 brands, just behind Huggies (33%) and Pampers (26%). Sales of the Amazon’s wipes have grown 266% YOY, and customers who view Amazon’s product are three times more likely to purchase than the category average, according to the study.
Finally, 1010data analyzed the online speaker market, which generated an estimated $1 billion in sales this past year. Amazon.com accounts for a booming 89% of total online speaker sales, and Amazon Echo as a brand holds a 45% market share among the top 10 brands based on dollars sold. Specifically, Amazon Echo is the most popular speaker sold online, and sales have grown 67% year over year, research revealed.
“Reasons for Amazon’s success across different markets vary,” Alpert said.
“In batteries, they have a price-competitive product in a largely commoditized market with little brand loyalty. In speakers, they’ve developed truly innovative products that are redefining the market,” he added. “The bottom line for brands is they can no longer view Amazon as solely a channel, and need to acknowledge Amazon as a competitor.”
New retailers fill redeveloped New Jersey center
Target, HomeGoods, and Petco will be opening this month at Closter Plaza, a Whole Foods-anchored center in Closter, New Jersey, undergoing a complete redevelopment.
Owner Edens has stated it is “re-energizing” the 208,337-sq.-ft. center with tenants possessing greater appeal to affluent local residents. The developer reports that the average household income within a five-mile radius of the center is $134,000.
Chic workout chains Orangetheory, CycleBar, and The Bar Method will be opening at Closter in 2017, in line with Eden’s plan to make it the region’s top fitness destination. Cosmetics shop Bluemercury and Laveli salon will add to the appeal for upscale women. New food and beverage options including Bareburger, Distrito, and Village Whiskey will also be part of the new lineup.
Edens reported that Closter Plaza will also be one of the first U.S. locations for Cinemex Movie Theater, a Mexico City-based chain.
AmEx: Holiday spending, mobile usage jumps this holiday season
It may only be the first week of November, but American shoppers are steadily crossing items off of their holiday shopping lists.
As of the end of September, one-third (33%) of consumers had already started their holiday shopping, up significantly from 25% in 2015. Further, they expect to spend an average of $908, an 8% increase from last year ($839 in 2015). Among affluent consumers, this threshold increases to an average of $1,513.
These details were revealed in the “American Express Spending and Saving Tracker,” a report that is based on responses from 1,540 adults in the U.S. population, with a minimum annual household income of $100,000.
“While consumers are spending more money on gifts this year, they are becoming savvier with how they spend their time shopping,” said Kartik Mani, executive VP of global consumer lending at American Express.
That said, a good portion of this spending will involve mobile devices. More than three in four Americans (76%) will use their mobile devices, whether browsing, comparing prices or viewing deals this holiday season. This is a jump from 58% in 2015. There has also been a significant increase (62%) in Americans planning to purchase and/or redeem e-gift cards on mobile devices this year (26% vs. 16% in 2015), the report said.
Despite mobile growth, virtually all consumers (94%) will turn to “traditional” e-commerce sites, whether they’re researching, comparing prices, looking for hard-to-find gifts, or making a purchase. In fact, over the past four years, about 60% of consumers have preferred to make their holiday gift purchases online, the study said.
The “go to” places for online holiday shopping however, will be shopping networks, such as Amazon and eBay (65%), followed by superstores, like Target and Walmart (48%), which give consumers the convenience of “one-stop shopping” for everyone on their list, data revealed.
While holiday shopping has already commenced for some, Black Friday still remains a “shopping priority” among both retailers and consumers. Fifty-three percent (53%) of consumers plan to shop on Black Friday this year, up significantly from 45% in 2015 — the highest level of participation since the study’s inauguration in 2010. Meanwhile, 50% of consumers plan to shop on Cyber Monday, up slightly from last year (47%), the study said.