eCommerce

Study: Amazon Private-Label Products Aren’t Market Disruptors

Study: Amazon Private-Label Products Not Popular

A new study by Marketplace Pulse showed that Amazon-owned private-label brands aren’t as successful as many think, according to a report in Bloomberg.

The New York-based eCommerce research firm found shoppers aren’t any more inclined to buy the Amazon brands, even when the company highlights them in search results.

“We analyzed over 23,000 products launched by Amazon under more than 400 different brands. Some of those brands are private-label brands built by Amazon, and some are exclusive brands made by a third party. All under the 'Our Brands' umbrella, a collection of Amazon private brands and a curated selection of brands sold exclusively on Amazon,” the study said.

“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,” it continued. “It is quantity vs. quality – AmazonBasics represents less than 5 percent of products launched, but more than 57 percent of sales.”

The study analyzed sales rankings and customer reviews as metrics for sales volume, and found that Amazon’s success with its own brand mostly comes from people looking to save money on generic household items.

“This idea that Amazon can introduce a product and magically use data to dominate a category is just a conspiracy theory,” said Juozas Kaziukenas, founder of Marketplace Pulse. “There are a couple of successful examples everyone uses, but most of their products aren’t successful at all, and many other companies continue to outsell Amazon even after it introduces its own competing brands.”

For example, customers don’t resonate with Amazon apparel, such as the brand “A for Awesome,” a children's clothing line.

Amazon has upwards of 550 of its own goods, and not many of them are popular. The company has, however, been successful in the battery department, and a 2016 study showed that it had 94 percent of all online battery sales.

“Selling cheap batteries is very different than building brands,” Kaziukenas noted. “Even when Amazon says ‘check out our own brands,’ consumers don’t know what it means, and wonder why they should buy this thing they never heard of before.”

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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