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Report: Amazon’s private-label lines are forces to be reckoned with


Amazon is synonymous for stealing marketshare from established retail brands. Now it upping the ante with private-label merchandise.

By leveraging its online shelf space to introduce its own line of new private-label products, Amazon is changing the dynamic in the marketplace once again, according to a report by 1010data Market Insights. This time among category leaders, as Amazon’s private label line directly competes with national suppliers.

“No matter the market, the challenge for brands in an increasing number of categories is that Amazon is the top online channel,” said Jed Alpert, senior VP of marketing at 1010data. “Amazon is leveraging its dominance to sell its own private-label brands, which compete with traditional suppliers.”

Not only is Amazon heavily competing with category leaders, but in certain cases, commanding its online categories. This was revealed in analysis from 1010data Market Insights, which researched sales trends from September 2015 to August 2016 among three key online categories -- batteries, baby wipes and speakers.

Findings revealed that Amazon is excelling as it competes with self-named lines across each category.

For example, 94% of all batteries sold online are sold through Amazon sites. When diving deeper however, the AmazonBasics brand accrued approximately $113 million in online battery sales were this past year.

Called AmazonBasics, the line is among the top 10 battery brands, and it accounts for about one-third of battery sales online, boasting 93% of year-over-year (YOY) growth. With an online conversion rate that is 1.5 times greater than the category average, consumers are more likely to buy Amazon batteries once they view them online, research revealed.

There is a similar story across the baby wipes category. At the end of 2014, Amazon introduced Amazon Elements, a line that includes baby wipes and is exclusive to Amazon Prime members.

Despite the limited audience, Amazon Elements has a 16% market share — and is considered one of the top brands online for baby wipes — based on total dollars sold among the top 10 brands, just behind Huggies (33%) and Pampers (26%). Sales of the Amazon’s wipes have grown 266% YOY, and customers who view Amazon’s product are three times more likely to purchase than the category average, according to the study.

Finally, 1010data analyzed the online speaker market, which generated an estimated $1 billion in sales this past year. accounts for a booming 89% of total online speaker sales, and Amazon Echo as a brand holds a 45% market share among the top 10 brands based on dollars sold. Specifically, Amazon Echo is the most popular speaker sold online, and sales have grown 67% year over year, research revealed.

“Reasons for Amazon’s success across different markets vary,” Alpert said.

“In batteries, they have a price-competitive product in a largely commoditized market with little brand loyalty. In speakers, they’ve developed truly innovative products that are redefining the market,” he added. “The bottom line for brands is they can no longer view Amazon as solely a channel, and need to acknowledge Amazon as a competitor.”
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