Amazon May Make Next Private Label Push in Diapers, OTCs

Amazon is expected to make a stronger private label push in the next year that includes more CPGs, including baby diapers and over-the-counter medication, according to a new report from One Click Retail.

The prediction is part of a thought piece from the Sandy, Utah-based ecommerce market data provider, which outlined Amazon’s approach to developing private brands: Release sample products; monitor the products’ performance; and plan a full category release for winning categories. Four categories that the company is anticipating are AmazonBasics Pet Carriers, Mama Bear Diapers, AmazonBasics Patio Heaters and Basic Care OTC medicine, the last being a “wild card.”

For the Mama Bear diapers, One Click Retail noted that the Amazon Elements brand already is strong in baby wipes, and has been testing products in related categories such as diaper pail refills and pouch baby food, both tested during the latter half of last year. Despite Amazon's having failed once before trying to launch baby diapers, the data that it collected, a sample product line launched last November and a one-month promotion this February show strong potential for another attempt to crack the category.

“Though the February promotion was successful, lifting estimated weekly sales from $20K to $100K, the long-term lift is still uncertain,” One Click Retail wrote. “However, diapers are a huge category – $530M in 2017 sales – so we expect Amazon to double down in this space sometime within the next 12 months.”

Meanwhile, an expansion into OTCs under the Basic Care brand is expected next year or later, despite Amazon’s 60-SKU Basic Care launch last August being seen as lackluster: In quarter one of 2018, the brand reportedly sold only $20,000 in estimated revenue and has not yet been supported by a kick-start promotion, though that's “likely to come in the near future.” One Click Retail acknowledged that the OTC expansion is more of a “wild-card” prediction; it stressed that at this point, Amazon’s Basic Care launch isn’t so much a bid to take over online OTCs as it is a first step in determining how and when to make its next move.