Amazon is (quietly) upending private branding. Will others follow?
Through a special arrangement, presented here for discussion is a summary of a current article from the Spieckerman Retail blog.
Over the past few years, I’ve touted private brand development as one way to gain distance from Amazon.com while its sights were temporarily set elsewhere, with the caveat that the advantage would be short-lived.
Fast forward a few retail seconds and Amazon has procured hundreds of trademarks and launched piles of private brands across multiple categories practically overnight.
It might seem as though Amazon is just taking a conventional retail practice to a scale-bending level. But Amazon is also defining the evolution of private brands themselves. Research has proven that consumers don’t always associate private brands with their retail owners, but Amazon stands alone by combining a deliberate stealth attack with unprecedented scale.
Amazon-owned brands are presented just like any others on its site. Check out a Lark & Ro-branded dress and you’ll find standard-issue brand statements under “from the manufacturer.” You’ll find no proud declarations and nary a mention of Amazon in the copy. Even Amazon’s eponymous Basics line follows this low-key approach. Amazon doesn’t seem to care if shoppers associate its brands with the mothership. In fact, Amazon might even prefer that they don’t, to the tune of potentially hundreds of new monikers.
I see three main advantages to taking such a contrarian path, particularly in the digital space:
- Unobstructed affinity – When shoppers aren’t encouraged to think about brand association or mull over private brand economics, they are free to focus on other attributes that play to Amazon’s strengths, like quick delivery, no-hassle returns and competitive pricing.
- Margin multiplication – Amazon doesn’t have to carefully carve out “good, better, best” propositions and agonize over pricing architecture. Its shoppers define what value means to them during every visit. Amazon can present new brands at profitable price points at will, then track and tweak the details based on shopper response and competitors’ offerings.
- Platform Loyalty – Amazon’s authority stems from the benefits inherent in its platform, which don’t necessarily parlay into products. Amazon’s inconspicuous brand portfolio ensures that the spotlight stays fixed on its established loyalty-drivers.
Will more retailers forego bragging rights to populate their online platforms with secret brands? Will we even know when and if they do?
DISCUSSION QUESTIONS: Is the scale or stealth-approach of Amazon’s private label strategy a bigger threat to competitors? What benefits or drawbacks might there be for other retailers attempting to emulate Amazon’s secret brand strategy?