Amazon Prime Day is one of retail’s largest and most lucrative shopping holidays. And the online mega-marketplace has been positioning itself for even greater success with its private-label business, according to 1010Data.
This year’s two-day Prime Day festivities, which will take place June 21-22, stand to shine a brighter spotlight on Amazon’s growing roster of in-house labels, which deal in categories ranging from electronics and home wares to apparel and footwear. The proof is in the numbers, with Amazon generating $8.1 billion in sales on private label items alone last year—an increase of 48 percent from the year prior, accounting for 2.7 percent of the company’s total U.S. sales in 2020, according to 1010Data. On Amazon’s delayed Prime Day last October, the company’s owned brands earned 15 percent of the event’s total sales.
Over the past four years, Amazon’s stable of private-label brands, which are blended into the site’s other offerings, have seen sales surge an average of 39 percent, amounting to 164 percent in growth since 2017. In 2020 alone, private labels made up more than 6 percent of Amazon’s total first party, or direct, sales, up 1.4 percentage points from 2017.
This meteoric success can be attributed to a number of benefits enjoyed by Amazon’s private-label brands, 1010Data said, including prominent placement in consumer search results and on the site’s homepage. The events of 2020, which saw consumers flocking to the online marketplace in droves due to a dearth of options at physical retail, further fueled Amazon’s overall growth. The pandemic led to a 66-percent surge in U.S. e-commerce sales for the company, with in-house brands seeing a 48-percent increase.
While Amazon’s electronics brands, like Echo speakers, Kindle tablets, and FireTV Sticks, played a pivotal role in the company’s continued private-label windfalls, several other categories saw notable acceleration last year. In-house apparel and footwear brand sales climbed 72 percent, while sales of Amazon-owned health and beauty products increased by 86 percent and household essentials blossomed with 131-percent growth.
The site’s private-label brands aren’t just marketed efficiently, 1010Data said—they also ensure that virtually all profits benefit Amazon directly. While the third-party marketplace was responsible for 61 percent of Amazon’s total U.S. sales last year, those sellers accounted for just 2 percent of sales of Amazon’s private-label products, as sellers are restricted from listing them. The small number of items that were sold by third-party partners were made up of refurbished Amazon electronics, 1010Data said.
Amazon’s pointed efforts to diversify its in-house labels beyond techy gadgets highlights a hunger to lead in the fashion, furniture and beauty space, it suggested. In fact, tech giant outpaced Walmart as the most shopped apparel retailer in 2020, and of the site’s top 30 in-house brands, 63 percent sell apparel products. Amazon is expected to attempt to cash in on investments in those businesses later this month, with more prominent placement and irresistible deals on goods like clothes and shoes on Prime Day, 1010Data said.