Amazon Grocery Private Label Remains Limited: Report

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Amazon Grocery Private Label Remains Limited: Report

By Bridget Goldschmidt - 06/19/2018
Amazon's Wickedly Prime brand offers 81 SKUs

A new report from New York- and Hong Kong-based retail think tank Coresight Research has found that out of nearly 7,000 private label products, ecommerce giant Amazon offers just two own-brands of food and beverage products, accounting for 124 items: Wickedly Prime and Happy Belly.

The health and household category, making up 126 items, encompasses one of Amazon’s oldest private labels — Amazon Essentials, which launched in 2014 — as well as Presto and AmazonBasics, according to "Slicing and Dicing Amazon’s Private-Label Offering" by Coresight CEO and Founder Deborah Weinswig. These brands offer such items as multivitamins, baby care products and cleaning products.

Meanwhile, almost 5,000, or three-quarters, of the company’s private label products are in apparel, divided across men’s, women’s and children’s clothing and footwear, with home and kitchen, including towels, bedding and cookware, the only other category with a substantial number of private label items, at 852.

Although they account for just a tiny fraction of Amazon’s private label portfolio, however, Coresights’s report found high-volume grocery items to be among the most reviewed of Amazon’s private labels, despite the fact that product lines had a limited number of products.

For instance, Amazon Elements, the site’s most-reviewed private label brand per product, has a relatively high star rating of 4.4 out of five, with the number of customer reviews boosted by two baby-wipe products, which have each received 10,000-plus customer reviews. The brand offers just 28 products in total, while Presto, offering only nine products across detergents and household paper products, and a number, has garnered several hundred reviews for a number of its items, indicating substantial consumer trial of the brand. The items sold under the Wickedly Prime label, Amazon’s core food brand, with 81 products, have each generated an average 51 reviews and a score of 4.2. Meanwhile, Amazon’s other food brand, Happy Belly, offering just 43 items, scores an average of 4.3 from an average 58 reviews per product.

Among the company’s nonfood private label, AmazonBasics is also highly reviewed, registering an average rating of 4.4 stars out of five. One of its items, a USB charging cable, has spurred more than 57,000 shoppers to post a review, making it the most-reviewed private label product on Amazon. Further, a pack of 48 AA AmazonBasics batteries inspired more than 20,000 online customers to write a review.

Brick-and-Mortar Opportunity

While Amazon sells items sold under Whole Foods’ namesake brand and in its 365 Everyday Value private label product line – the latter of which Salt Lake City-based One Click Retail reported last December had become the No. 2-selling private brand sold on the site, right after AmazonBasics, there seems as yet no plan to sell Amazon’s private label products in brick-and-mortar Whole Foods stores.

Given the limited private label ranges, any impact on Whole Foods from stocking [Amazon’s product lines] in stores would likely be very minimal," Weinswig told Progressive Grocer. "Amazon has little to lose by doing so, but, in many categories, does it need to? Whole Foods already has a more established range of its own private labels.

"There may be two benefits to bringing Amazon’s private labels to Whole Foods," she continued. "First, stocking Amazon private labels may give Whole Foods greater scope to compete on multiple price points — i.e., the Amazon private labels could be priced lower than Whole Foods’ own labels. Second, Amazon private labels could be used to fill in the gaps in the Whole Foods private label offering.”

Noting the "substantial visibility of the Amazon brand in Whole Foods stores — through point-of-sale signage and by introducing discounts for Prime members, for example," she pointed out that “there is clearly no reluctance to bring the Amazon brand into Whole Foods stores.

"However, we think there is much more scope for [supplier partnerships and established private labels] to flow the other way: from Whole Foods to Amazon," continued Weinswig, affirming the Seattle-based ecommerce company’s strategy so far in this regard. "After all, the acquisition of such expertise in grocery must have been a driver behind Amazon’s purchase of Whole Foods in the first place."

As for whether the Austin, Texas-based natural food grocer should carry Amazon’s private label apparel and housewares items, she said: "There looks to be some opportunity to bring complementary nongrocery products into Whole Foods stores, though we think it would need to be done selectively and sensitively. Whole Foods stands for quality, more natural food products, and Amazon would need to bring in nongrocery ranges that complemented that positioning: Cookware should work well, and there may be opportunities to bring in other appropriate ranges in a selective way — for example, a range of organic cotton apparel."

Coresight’s report reflected products listed on Amazon.com in early May of this year.