Amazon is diversifying its private brand strategy
Sales of Amazon's new Earth+Eden diapers, a line owned and manufactured by First Quality but found exclusively on Amazon, tripled after its late-August launch, driven by promotions but also by its high profile as an Amazon brand, according to a report from One Click Retail.
Amazon is leaning on both its own private labels and exclusive products like Earth+Eden (which don't include the 100% refund guarantee that its private label items do) to drive sales in consumer goods. After diapers, One Click Retail calls the health and personal category "the next major frontier for Amazon's house brand strategy," noting that private label herbal supplements sales grew 45% in the second quarter from the first, and vitamin sales grew about 40% in the period while also "collecting consistently high customer ratings."
Among other offerings, GNC recently launched a new Amazon-exclusive brand called CHALLENGE by GNC; Perrigo, one of the largest manufacturers of private label over-the-counter medications, has launched a new Amazon-exclusive infant formula dubbed Love & Care; and Amazon has a new exclusive line of hand sanitizers, as noted by TJI Research's Justin Smith in an email to Retail Dive.
Amazon appears to be diversifying its private label strategy, with a mix of owned and exclusive brands.
The e-tailer's private label approach arguably began with AmazonBasics and Amazon Elements goods. In fact, while Amazon continues to beef up its brand stable, AmazonBasics continues to outperform all of them combined, according to research from Marketplace Pulse.
The e-commerce giant is also succeeding with a "brandless" strategy, Marketplace Pulse also said in a blog post. For example, while shoppers may turn to Amazon to find other brands' small electronic goods, batteries or kitchen gadgets, they often end up buying the AmazonBasics version, according to the report. If Amazon branches out into personal care (beyond Whole Foods' already popular 365 line), it could be a challenge to the company Brandless and Target's new Smartly label.
Some of these items (unlike Amazon's new mattresses), could end up on store shelves at Whole Foods, Amazon Go or its new "4 Star" concept, which has opened a store in New York.
"Amazon is in the process of ramping up its physical retail infrastructure as well," Smith wrote in a TJI Research blog post. "It's possible that Amazon could stock those stores with first aid items, decreasing the number of trips made to traditional retail drug stores like Walgreens, Longs, Rite Aid, Walmart, Target and many others."
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