As if we needed more evidence that Amazon is changing anything and everything retail, the e-commerce pioneer appears to be pushing into the private label space faster than many realized.
According to an article from business site Quartz, Amazon has been aggressively, though quietly, developing private labels across multiple categories, including grocery.
While the company has been producing a selection of basic products—batteries etc.—for sometime, by digging deep into Amazon’s trademark applications Quartz found 19 brands that are owned by Amazon but, for the most part, are not clearly identified as Amazon brands on the site.
In other words, consumers may be buying Happy Belly coffee or Wagyu Single Cow burgers without realizing they are actually brands made by and for Amazon.
“Perhaps what Amazon is trying to do as it rapidly expands into new businesses—especially business areas where it might not have forged partnerships with well-known brands—is to give the impression to customers that there are tons of options to choose from, when in fact, they’re really just choosing between different Amazon brands,” wrote Quartz reporter Mike Murphy.
Commenting on the Quartz story, FoodDive’s Jeff Wells wondered if the lack of transparency could hurt Amazon, but also said the move made sense since consumers may not like the idea of their Wagyu beef burgers coming from a company famous for distribution and technological innovation.
“Similarly, shoppers looking to support niche brands — of which there are many on Amazon’s site — might not be thrilled to learn Amazon is behind that all-natural granola or that fair trade coffee,” he wrote.
FoodDive reported last month that private label now has a 17% market share in the U.S. (about half of what it is in Europe) and is expected to pick up share through 2022.
The Quartz revelations come nearly two months after it was announced Amazon was buying Whole Foods.
On a post at Forbes earlier this week, before the Quartz story was published, retail and merchandizing expert Greg Petro suggested there were two primary motivations for Amazon to buy Whole Foods. First, it was about more consumer data. But secondly, and just as important, it was about increasing its private label offering; Whole Foods has a strong private label business thanks to its 365 brand.
“[P]rivate and exclusive brands create a reason for the consumer to buy through Amazon as opposed to going elsewhere,” he wrote.
“If Amazon has the best shopping experience, the fastest delivery, the best prices, and now unique products, why would you shop anywhere else?”