Retail: 66
Retail: 92

Amazon’s Private Label Thrust

By Bob Mcgee – april 3, 2017

The online behemoth is developing an apparel strategy with eight private-label brands, including Goodthreads (casual men’s shirts and pants) and Scout & Ro (kids’ basics) and is said to be prepping for an eventual entry into authentic activewear private labels. The initial private-label emphasis appears to focus on smaller orders of simple, basic items.  

“Amazon is the chief threat to brands,” says Ken Cassar, VP for Slice Intelligence. “…But their (private label) men’s apparel is relatively sideways right now,” he admits. The percentage of Amazon’s sales generated by men’s apparel was zero percent before the February launches of Goodthreads and Amazon Essentials (basic polos and shorts) when the category rose to 8 percent of monthly revenues. Private label men’s apparel accounts for 16 percent of all online purchases, according to Cassar, who adds the “online shopping environment is increasingly amenable to private label.”

Cassar, who co-hosted a RetailWire webinar last week, disclosed how Amazon pushes its own brands to those who use the website’s Alexa portable Bluetooth speaker to inquire about products. Only two choices are presented by Alexa. The first is Amazon’s own label product followed by the branded product that sells most in the category.

Retail brands generally have the edge with consumer loyalty, but there are exceptions. In batteries, for example, Amazon Basics outsells Duracell on the website.  

Cassar reveals, “private label is on the ascent in some categories online and flat in others.”

Right now, the online appetite for private label products skews slightly younger, slightly more male. Where it eventually ends up in private-label apparel remains unclear at this point, but Amazon appears intent on being a competitor.   Meanwhile, last week, according to several reports, Amazon delayed the opening of its first cashier-less convenience store. The company is said to be ironing out issues with the store’s technology designed to automatically charge customers as they depart without using checkout lines or traditional cash registers.

Subscribe Now!