This past week the New York Times featured the article “How Amazon Steers Shoppers to Its Own Products” by writer Julie Creswell presenting a detailed look at private brand at Amazon. If you have not read the article you certainly should it presents an interesting if biased perspective on both private brand in general and private brand at Amazon.
The article begins
“It started with a simple battery.
Around 2009, Amazon quietly entered the private label business by offering a handful of items under a new brand called AmazonBasics. Early offerings were the kinds of unglamorous products that consumers typically bought at their local hardware store: power cords and cables for electronics and, in particular, batteries — with prices roughly 30 percent lower than that of national brands like Energizer and Duracell.”
The author makes the interesting choice of artificially establishing the beginning of private brand at Amazon two years after the online retailer debuted its now iconic private brand e-reader Kindle.
Several paragraphs later the article begins to subtly malign the Amazon private brand portfolio:
“The company now has roughly 100 private label brands for sale on its huge online marketplace, of which more than five dozen have been introduced in the past year alone. But few of those are sold under the Amazon brand. Instead, they have been given a variety of anodyne, disposable names like Spotted Zebra (kids clothes) …”
That’s right “anodyne, disposable names.”
For readers unfamiliar with anodyne Meriam Webster defines it as “not likely to offend or arouse tensions.”
The writer from the New York Times has exercised her branding expertise and opinion to determine the 100 or more brand names created by Amazon are both innocuous and disposable – that’s objective reporting.
Perhaps more disturbing than the obvious bias against Amazon is the underlying belief that retailers should not own brands.
“Now, with its expansion into private label, Amazon has shifted away from being an impartial, may-the-best-product-win distribution partner to being a direct competitor to those other vendors.”
Amazon’s private brand portfolio follows in a long and historic past that includes some of the best-loved brands of the last 100 years: Eight O’clock Coffee at A&P, Craftsman Tools at Sears and more recently Simple Truth at Kroger.
Yet Creswell calls the emergence of brands at Amazon the “private label threat” quoting Scott Galloway, a founder of business research firm now called Gartner L2 and a professor of marketing at New York University Stern School of Business, from a presentation last year. “I think, effectively, you have a company that has conspired with about a billion consumers and technology to destroy brands,” said Galloway “Their attitude is that brands have, for a long time, earned an unearned price premium that screws consumers.”
The quote and the entire story begins from the notion that “national brands” or manufacturers are the only rightful owner of brands and that retailers are out to “destroy brands.”
Perhaps it’s a subconscious bias or perhaps its driven by billions of dollars of ad revenue over the last 100 years from P&G, Coke, Unilever and their peers but it is an unfounded bias.
In 2018 retailers have not only the right to own Brands but the necessity. As the retail landscape and the customer changes it is imperative that retailers use every tool at their disposal to not only survive but to thrive. For the New York Times to essentially argue that a brand is “real” because it is owned by one type of company versus another is absurd.
Neither emerging brands or private brands will destroy today’s legacy “national brands” irrelevance and the changing consumer will push them into the graveyard of brands alongside Hai Karate, Blockbuster, Dunkaroos, Viceroy Cigarettes, Squeeszit and General Foods
Retailers are not “out to destroy brands” they are out to become BRANDS and to own BRANDS.