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Amazon Private-Label Stealing Market Share from Long-Standing Category Leaders

Amazon Fashion
Amazon has done it again.

The online seller of virtually everything has ramped up its private-label program in recent years, leveraging its treasure trove of data to produce exactly what consumers want in more than a dozen categories—and it’s paid off. According to new research from insights platform 1010Data, Amazon has succeeded in stealing market share from reputable brands in certain categories.

1010Data’s market insights team studied consumer spending data gathered from millions of consumers between September 2015 and August 2016 for batteries, speakers and baby wipes and discovered Amazon’s emergence as a major threat to some big names.

For instance, Amazon and its affiliates controlled 94 percent of the $133 million spent on batteries online last year. But among the top 10 brands, AmazonBasics batteries accounted for about one-third of all online sales, with 93 percent year-over-year growth, beating the likes of Duracell and Panasonic.

Similarly, the Amazon Elements brand of baby wipes—available exclusively to Prime members—has seen its sales grow 266 percent year-over-year to reap 16 percent of the estimated $60 million in online sales. While household names Huggies and Pampers still own 60 percent of the online baby wipes market between them, Amazon is catching up, especially given its limited audience.

In addition, Amazon Echo is the most popular speaker sold online, with sales growing 67 percent year-over-year.

Based on 1010Data’s research, apparel brands and retailers would be wise to worry about Amazon’s recently launched private-label clothing brands.

“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 its own private-label brands which compete with traditional suppliers,” Jed Alpert, senior vice president of marketing at 1010Data, said.

It’s been nine months since news broke that Amazon was selling at least seven of its own clothing labels online, each offering on-trend items priced under $100. Notably, Morgan Stanley analysts suggest that the company is already number two in terms of overall U.S. apparel sales, outranking the likes of T.J. Maxx and Marshall’s, while Cowen and Company put its year-to-date growth of clothing sales at 26 percent. But how much of those sales relate to its private-label program remains to be seen.

As Alpert concluded, “The bottom line for brands is they can no longer view Amazon as solely a channel and need to acknowledge Amazon as a competitor.”