[KGVID width=”600″ height=”320″]http://c0000626.cdn2.cloudfiles.rackspacecloud.com/2016_12_DurhamFF.mp4[/KGVID] In this edition PLMALive! Christopher Durham takes a look at Internet retailer Amazon rapidly expanding portfolio of private brands and what it means for everyone else.
Amazon in Growth Mode
Since its inception in 1995, internet retail giant Amazon has become a leader in retail innovation. Consequently, competitors in virtual every channel track the retailer to see what its next move might be. It rarely disappoints. In 2016, the conversation turned to the launch of private brand food and once again the analysts and retailers began to buzz.
In mid-2016, Amazon quietly launched its foray into private brand food with the introduction of products from two new brands, Happy Belly and Mamma Bear, each of which are only available to Amazon Prime members. Amazon is expected to launch two additional brands: Wickedly Prime, which will feature snack foods, and Presto! which is expected to include household products such as laundry detergent
Despite its high profile, consumable private brands are only a small part of the Amazon private brand story. A story which includes an extensive and complex private brand portfolio, comprised of a robust set of brand assets, each with its own business role.
In late 2007, Amazon introduced their now iconic Amazon Kindle. The portable reader debuted not as a cheap private label copy, but instead as a fully formed brand intent on extending the Amazon relationship into the hearts of American consumers. Today that brand experience extends well beyond the first e-reader to include: Kindle Fire, Dash, Echo, and the Kindle Fire Stick, just to name a few.
The portfolio also includes brands that play traditional private label roles like AmazonBasics, their electronics accessories mega-brand, Pinzon kitchen gadgets, Strathwood outdoor furniture, Pike Street bath and home products, and Denali.
In early 2016, Amazon quietly introduced seven new fashion private brands which accounted for approximately 1,800 products. The brands include Franklin & Freeman, Franklin Tailored, James & Erin, Lark & Ro, North Eleven, Scout + Ro, and Society New York, each focusing on a different customer demographic or lifestyle.
Lest you think Amazon can do no private brand wrong, the retailer famously stumbled with the launch of Amazon Elements with inferior diapers that moms quickly rejected. Amazon Elements promised customers greater transparency, however, the retailer pulled the diapers just weeks after launching, citing design flaws.
In late 2015, Amazon unceremoniously exited the Amazon Fires Phone after a multi-million-dollar investment in developing and launching the phone. Despite their best efforts, the Amazon Fire phone was universally rejected by American consumers.
Private brand at Amazon has no limitations or restrictions. They have thrown off the chains of private label history to leverage their entire private brand portfolio to solve different business problems and speak to different customers. In so doing, they have created a diversity of private brand missions that is capable of both providing traditional private label value and much-coveted differentiation.
Perhaps the best example of this is their impressive selection of original private brand TV programming on Amazon Prime. Over the last few years, it’s racked up numerous Golden Globe and Emmy Awards for shows like Transparent, Man in the High Castle and Mozart in the Jungle.