TECHNOLOGY

Study: Amazon’s private brands not all that popular

BY CSA STAFF

Amazon’s rapidly growing collection of private brands haven’t proved the threat that many companies initially feared.

According to a report from e-commerce research firm Marketplace Pulse, most Amazon-owned brands aren’t resonating with shoppers yet. The firm analyzed more 23,000 products launched by Amazon under more than 400 private label brands built by Amazon or exclusive-to-Amazon brands made by a third party. It found that only a handful of brands, notably the very successful AmazonBasics and Pinzon, made up the bulk of private brand sales.

“Amazon added more than 100 brands in 2018, but none of the recent launches are category leaders,” the study found. “Amazon has attracted much attention with every new brand they launched, however the assumption that every new brand will be as impactful as AmazonBasics is unfounded.”

AmazonBasics represents less than 5% of products launched, but more than 57% of sales, the report said. Amazon’s products business generated $7.5 billion in 2018 and will reach $25 billion by 2022, according to estimates from investment firm SunTrust Robinson Humphrey.

“However, these estimates include sales from Echo devices and Amazon-owned Whole Foods grocery brands,” the report noted. “Without those, total sales by all private label brands are under $1 billion.”

Based on its analysis, Marketplace Pulse said that Amazon’s private label efforts have been given too much credit, both in their ability to disrupt categories and the capability to utilize internal data.

“Outside the outliers like AmazonBasics batteries, most brands launched didn’t do well, despite the unfair access Amazon has to its platform,” the report said.

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