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BizReport : Ecommerce archives : November 03, 2016

Report shows Amazon effect moving to private label

While Amazon is still primarily thought of as a digital goods - books, movies, magazines - hub, their effect is quickly pushing past digital and into real-world. That is the takeaway from one new reports which shows how the online giant is now pushing private label brands and even groceries.

by Kristina Knight

According to new 1010data, Amazon's private label is beginning to show strong competition in the areas of speakers, baby wipes, and batteries. Over the past year, for example, online battery sales topped the $110 million mark, with Amazon sales accounting for 94% of those sales.

"No matter the market, the challenge for brands in an increasing number of categories is that Amazon is the top online channel. And, Amazon is leveraging its dominance to sell their own private-label brands which compete with traditional suppliers," said Jed Alpert, Senior Vice President of Marketing at 1010data. "Reasons for Amazon's success across different markets vary. 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. The bottom line for brands is they can no longer view Amazon as solely a channel and need to acknowledge them as a competitor."

Other interesting findings from the 1010data report include:

• Amazon's Elements brand holds a 16% share for baby wipes, after releasing in 2014
• Elements wipes have shown a 181% YoY growth rate
• Amazon accounts for 88% of online speaker sales, with their Echo holding a 42% market share

How have Amazon's private label sales grown so fast? Walker Sands data suggests part of the pull in that a growing number of shoppers are buying products - from clothing to shoes and even groceries - online. These shoppers are looking for one place where they can pick up everything, without leaving their home, and Amazon is possibly the largest online hub to offer this service.

According to Walker Sands Future of Retail study 31% of shoppers are now shopping online at least weekly; nearly three-quarters are shopping online at least monthly.

Tags: 1010data, amazon, amazon ecommerce, ecommerce, ecommerce trends, Walker Sands

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