Amazon continue to add new departments such Car Store, DIY, Health & Beauty but a less visible area is their plans for own brands.
If you visit the Amazon site and search for “Amazon Basics” you will get over 49,000 results. Some products will be “basic” products from different manufacturers but others will be branded AmazonBasics. You will also be given the option of visiting Amazon’s own Store, AmazonBasics, which has the tagline “High quality products at the lowest price”. Currently they are mainly accessories for technology products such mobile phones and cables but is this the start of a bigger own brand move by Amazon?
Amazon have amassed a huge amount of data about who bought what, when, how much they paid and their entire customer history. Add all of the MarketPlace history and they have the data needed to identify segments where they could pick up significant extra margin by having an own brand range.
How can retailers with physical stores respond?
While Amazon have not yet announced any plans about further expansion into own brands some physical store retailers are reviewing their plans in case Amazon introduced own brand products into their market space. One response can be to increase the focus on a high quality customer experience in their stores and to make everything as simple and easy as possible for customers. Another is to put more effort into establishing and promoting their own brands, particularly in-store. These actions are good to do anyway but they now have a reason to move up retailers priority list.
At Pierhouse we are seeing a trend to put in solutions for own brand products quickly to meet a specific need in parts of stores rather than taking a long time to fix all of the necessary processes to introduce it store wide. (That can be done over a longer time frame without the short term commercial pressure.) Examples of solutions being planned are electronic shelf labels and highly flexible printed offers and product information that can change quickly or be made unique to each store in the estate. This gives retailers the tools to respond quickly to the risks of Amazon by firming establishing their own brands in store along with very strong reasons to buy. Of course it will also help respond to other competitors to.