Amazon Raises Minimum Wage for all US Employees to $15/Hour, UK as Well

In a move that will affect over 350,000 employees, Amazon announced today that it is increasing its minimum wage to $15 per hour for all US employees, effective November 1. The new rate applies to full-time, part-time, temporary, and seasonal employees.

Amazon says the change “will benefit more than 250,000 Amazon employees, as well as over 100,000 seasonal employees who will be hired at Amazon sites across the country this holiday.” It will also apply to Whole Foods employees.

“We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,” said Jeff Bezos, Amazon Founder and CEO. “We’re excited about this change and encourage our competitors and other large employers to join us.”

Amazon also said it would also, “Begin advocating for an increase in the federal minimum wage.”

“We will be working to gain Congressional support for an increase in the federal minimum wage. The current rate of $7.25 was set nearly a decade ago,” said Jay Carney, SVP of Amazon Global Corporate Affairs and former press secretary for President Obama.

Amazon said in its most recent annual report that its median employee compensation was $28,446 in 2017. Walmart announced in January that it was raising its minimum wage for US employees to $11 per hour.

Amazon also said it will phase out Restricted Stock Unit (RSU) compensation for hourly fulfillment and customer service employees. “They prefer the predictability and immediacy of cash to RSUs,” Amazon says. “The net effect of this change and the new higher cash compensation is significantly more total compensation for employees, without any vesting requirements, and with more predictability.”

Amazon has come under increased criticism for its pay disparity this year. Last month, Senator Bernie Sanders of Vermont introduced legislation called the Stop BEZOS Act that would tax corporations commensurate to the amount of government benefits low-wage employees receive in government benefits. Today, Sanders commended Amazon on their move.

“What Mr. Bezos has done today is not only enormously important for Amazon’s hundreds of thousands of employees, it could well be a shot heard around the world. I urge corporate leaders around the country to follow Mr. Bezos’ lead,” Sanders tweeted.

President Trump has also criticized Amazon on a number of fronts this year. In March, he accused Amazon of “putting many thousands of retailers out of business” and of receiving unfair tax treatment. In July 2017, he called Amazon a “monopoly.” However, Trump’s Amazon criticisms have not included commentary on the company’s hourly wages.

Amazon also announced today that it is increasing minimum wages paid to its UK employees. Starting November 1, minimum wages will increase to £10.50 ($13.59) per hour for all employees in the London area and £9.50/hour for staff in all other parts of the country.

Amazon has over 17,000 employees in Britain and plans to hire more than 20,000 seasonal employees for the holiday.

Amazon said the impact of the higher compensation on its financial reports will be reflected in its quarterly guidance.

Amazon Launches New Private Label Sports Supplements Brand, OWN PWR

Coming on the heels of its launch of its first private label mattresses, Amazon has launched a new private label sports supplements brand.

Amazon’s brand is called OWN PWR. Currently it includes 11 products — 8 general sports nutrition products (like whey protein and creatine) and 3 “Elite” pre-workout powder formulations.

Amazon has been making its OWN PWR items available on an invite-only basis since late August — we do not know how many invites Amazon sent out, but interested parties could apply on the product pages directly. However, as of today, OWN PWR products now appear to be available for sale without an invitation. All customer reviews we’re seeing are from the last few days.

Amazon has a number of private label and exclusive brands in the sports and nutritional supplement category.

Earlier this year, Amazon launched the Amfit Nutrition private label brand in its UK and EU stores. There are 2 products currently offered under the Amfit brand: whey protein powder and chocolate protein bars.

In addition, Amazon has multiple Amazon Exclusive brands in the US that offer nutritional supplement products. Amazon labels these “Our Brands” as well. They include:

  1. Enraged Nutrition – offers creatine and glutamine powders
  2. Flexatarian – offers a variety of whey protein and pre-workout powders
  3. P2N Peak Performance Nutrition – offers a variety of protein powders

As always, stay tuned to TJI for the latest as we continue to track Amazon’s private label efforts.

The TJI Amazon Brand Report – October 2018 Edition

TJI Amazon Brand Database – The Independent Global List of Amazon Private Label and Exclusive Brands

As one of the largest internet retailers and e-commerce platforms in a growing number of markets around the world, Amazon holds a unique position in an increasing number of retail product categories. Over the last decade, Amazon has introduced a number of private label and exclusive brands, and recently it has accelerated its efforts by bringing to market both many new brands and an increasing number of products offered under them.

But, while Amazon labels these brands in different ways in different places, there’s no singular comprehensive reference for manufacturers, brand owners, or retailers to find all of Amazon’s private label and exclusive brands in one place. That’s why we have created the TJI Amazon Brand Database — the independent global list of Amazon private label and exclusive brands.


275+ Private Label and Exclusive Brands

Some brands, like AmazonBasics, are in use by Amazon globally. Others, like Vedaka (Amazon’s spice brand in India) or Kid Nation (one of Amazon’s children’s clothing brands in the US) are only in use in one of Amazon’s country stores.

All told, we’ve identified 120+ Amazon private label brands and 150+ Amazon exclusive brands from Amazon’s retail sites around the world as of today, for a total of 275+ private label and exclusive brands combined. That represents a much larger number than has previously been identified in any reports we’ve seen.

As a few examples, some Amazon private label brands that you may not have seen before include Common District, Dayana, Denim Crush, Filgate, Smitten, Sprout Star, The Casual Grey, The Portland Plaid Co, Toes In A Blanket, and OWN PWR.

And the number is growing.

From Suits to Nuts, Furniture to Dryer Sheets, and Everything in Between

While Amazon’s brand portfolio is largest in clothing — there are over 125 private label and exclusive clothing, shoes, accessories brands in the US alone — Amazon brands run the gamut of consumer product categories.

For example, we count 16 food and grocery brands, 25 healthcare and beauty brands, and 14 household goods brands in the US alone. From Austin Mill suits to Sol nuts, Rivet mid-century accent chairs to Breezeo dryer sheets, Amazon’s thousands of private label and exclusive brand items cover a greater number of retail categories than you may think.

A Global Footprint

While the greatest number of Amazon private label brands are marketed in the US, Amazon has made efforts to build its brand portfolio around the world as well.

For example, in the UK and EU, Amazon has many private label clothing brands that don’t exist in other Amazon markets. And in India, Amazon has a spectrum of private label and exclusive clothing brands ranging from the traditional to the modern.

Dive In

We continue to find new brands on an ongoing basis, and we predict the number of brands is only going to grow.

The TJI Amazon Brand Database is a starting point for researchers and analysts to navigate the breadth and depth of Amazon’s private label and exclusive brands.

For professionals serious about tracking Amazon’s private brand efforts on an ongoing basis, subscribe to TJI Briefing, which covers the latest developments across Amazon’s brand portfolio.

The Big Picture on Today’s Echo Product Announcements: Amazon’s Subscription Services Strategy

In the future, we may experience Amazon primarily as a home (and business) operations automation company. A good portion of what we think of as “e-commerce” today may come to largely feel like automated supply replenishment happening in the background.

Amazon and Home Automation Infrastructure

In a certain sense, Amazon’s hardware strategy for the home is “boring.” Today, the company announced a clock, a microwave, a microphone, and speakers.

None of these products is going to set the world on fire by itself. But rather, they’re each a piece of the overall puzzle of building a system of unified home infrastructure that connects the hardware we see and touch every day with intelligent services that hold the data we need for daily life.

Today’s announcements are a clear indication that Amazon’s strategy is to build the nervous system that powers the home, and to build at-least-demonstration-quality hardware (or much better in some instances) in a variety of categories to accelerate the pace of innovation in and growth of the systems it wants to power.

A Subscription Services Future

Over 100 million people around the world subscribe to Amazon Prime today.  Millions more likely subscribe to Amazon Music Unlimited. And more are trying FreeTime Unlimited, Prime Channels, Audible, Kindle Unlimited, Pantry/Fresh, and other less-well-known subscription services that Amazon offers every day.

In fact, Amazon has created a subscription service around millions of consumable products it sells. Almonds? Subscribe & Save. Diapers? Subscribe & Save. OTC medicine? Subscribe & Save.

Amazon’s Dash Replenishment Service already re-orders supplies for your home (or business) when it detects supplies are low. (Why order potato chips when your smart potato chip container can automatically keep supply levels above desired thresholds for you.)

As more Alexa-connected devices are deployed in the home (and car), Amazon can provide more varied and sophisticated home services. For example, home security and automated appliance maintenance, just to name a couple related to products announced today.

And with those services comes increasing (and likely higher-margin) recurring subscription revenue. In some sense, selling toilet paper was just step one. (Though we believe Amazon could have improved e-commerce margins in the future as well as private label grows, but will probably just keep prices low.)


Amazon’s product announcements today:

  1. Echo Dot (3rd generation)
  2. Echo Show (2nd generation)
  3. Echo Plus (2nd generation)
  4. Echo Input
  5. Echo Link
  6. Echo Link Amp
  7. Echo Sub
  8. Echo Wall Clock
  9. Echo Auto
  10. Amazon Smart Plug
  11. AmazonBasics Microwave
  12. Ring Stick Up Cam
  13. FireTV Recast
  14. Alexa Connect Kit
  15. Alexa Guard, Local Voice Control, and More Alexa Features
  16. Alexa Presentation Language
  17. Alexa Smart Screen Device SDK

Is Whole Foods Driving Prime Membership Growth?

When Amazon bought Whole Foods a year ago, a common theory behind the rationale was that Prime could drive traffic to Whole Foods through membership deals. But are long-time Whole Foods shoppers who are not Prime members also more likely to join Prime because of those deals?

Per a survey from consumer research firm InfoScout, it appears that for many, the answer is yes.

InfoScout notes:

In addition to analyzing purchase data from Prime member shoppers, we fielded an InfoScout survey to understand how 1,006 long-time Whole Foods shoppers (people who had made Whole Foods purchases both pre- and post-Amazon acquisition) perceived the changes taking place in-store.

Of the surveyed shoppers, 11.2% claimed not to be Prime members, but 64.6% of those non-Prime members said they were considering Prime membership. The top reason for considering Prime? Access to in-store Whole Foods discounts (68.5%), followed by ease of shopping on Amazon (63%), and ability to get Prime shipping on Amazon (61.6%). The in-store discounts are clearly working toward Amazon’s ultimate goal – driving more Prime memberships.

Amazon, Samara Acquire “More” Retail Grocery Chain in India

Further its investment in India, Amazon and Indian private equity firm Samara Capital have acquired the More chain of retail grocery stores in India from Aditya Birla Group.

Samara will buy 51% and Amazon will buy 49%, to avoid regulatory restrictions that apply in situations of foreign majority-ownership. The total price was about USD $580 million. Per BusinessToday.in,

The deal will take care of ABRL’s debt that stood at Rs 4,000 crore as of March 2018. Once the process is complete Samara Capital and Amazon plan to rapidly expand the chain which was put on hold due to its burgeoning debt. They plan to set up 100-150 stores every year including neighbourhood supermarkets and hypermarkets. The plan for the current fiscal is to set up 90 stores.

Our take:

Amazon is continuing to heavily invest in India. India is a strategic growth market for Amazon, with intense competition from Walmart’s Flipkart and others. Owning (almost a majority of) a retail grocery chain will give Amazon a physical footprint through which it can accelerate the deployment of other services in the country.

Amazon Reportedly Planning on Opening Up to 3,000 Amazon Go Stores in 3 Years

Amazon is reportedly considering rapidly increasing its pace of investment in Amazon Go stores by opening up to 3,000 of them over the next 3 years. Per Bloomberg:

Amazon.com Inc. is considering a plan to open as many as 3,000 new AmazonGo cashierless stores in the next few years, according to people familiar with matter, an aggressive and costly expansion that would threaten convenience chains like 7-Eleven Inc., quick-service sandwich shops like Subway and Panera Bread, and mom-and-pop pizzerias and taco trucks. Chief Executive Officer Jeff Bezos sees eliminating meal-time logjams in busy cities as the best way for Amazon to reinvent the brick-and-mortar shopping experience, where most spending still occurs…

Amazon is targeting dense urban areas with lots of young, busy, affluent residents willing to spend a little more than a typical fast-food experience for better quality food, the people said. The target locations make it less of a threat to suburban gas station-convenience store combinations and more of a threat to big cities’ quick-service eateries, such as Subway Restaurants, Panera Bread Co. and Pret a Manger.

Our take:

  • Convenience stores have existed for a long time, but Amazon has unique data on consumer behavior and shopping patterns, and could positions its Go stores in locations it believes will be most likely to change behavior.
  • Most convenience stores are currently located at or near gas stations, and typically primarily stock candy, soft drinks, snacks, beer, and tobacco products.
  • We would view this as more of a threat to quick-serve restaurants, grocery stores, and (potentially) pharmacies.

For context, Amazon just opened its fourth Go store yesterday.

Amazon Continuing to Invest in Japanese Grocery Efforts

Last year, Amazon launched Fresh, its grocery delivery service, in Japan. Since then, Walmart and Rakuten partnered to take on Amazon in grocery delivery, though the service hasn’t launched that we’ve seen. (Walmart also owns Seiyu, a top supermarket chain in Japan, but is reportedly interested in selling it due to slow growth.)

Amazon Fresh Japan’s coverage area has been growing since launch. Initially, it covered a half dozen districts in Tokyo. Now, Amazon Fresh Japan delivers to “18 districts and 2 cities in Tokyo, 17 districts within 2 cities in neighboring Kanagawa Prefecture, and 2 cities in Chiba Prefecture.” Amazon says it delivers over 10,000 foods and daily necessities.

And Amazon is continuing to grow its Amazon Fresh Japan staff as well. Per Amazon.jobs, we are seeing several Amazon Fresh Japan listings:

  1. Senior Product Manager, Customer & Delivery Experience
  2. Vendor Manager, Grocery
  3. Brand Specialist, Grocery
  4. Buyer, Grocery
  5. In-Stock Manager, Amazon Fresh
  6. Area Manager, Fresh

Grocery is an extremely tough nut to crack, with low food prices, low delivery prices, and highly perishable inventory. We’ll be tracking Amazon’s Japanese grocery efforts as they continue to invest in this market.

Amazon Go Rollout: Store #4 Opens Today in Chicago

As we continue to track the rollout of Amazon Go stores, Store #4 opened today in Chicago at 113 S Franklin St.

It is on the first floor of the building that houses Amazon’s Chicago offices in the Loop. It is also the first Go store to launch outside Seattle, and the third to launch in the last month.

To recap, here’s a timeline of all Amazon Go launches to date:

  1. Seattle – Opened 1/22/18. Address: 2131 7th Ave.
  2. Seattle – Opened 8/27/18. Address: 920 5th Ave.
  3. Seattle – Opened 9/4/18. Address: 300 Boren Ave N.
  4. Chicago – Opened 9/17/18. Address: 113 S Franklin St.

Amazon has also posted job listings for upcoming Amazon Go stores it plans to open in New York City and San Francisco.

Large Restaurant Brands and the Future of Amazon Restaurants

Amazon Restaurants, which is live in 20 cities as of today, is looking to accelerate the growth of its restaurant supplier network by partnering with the largest restaurant brands in America.

“National restaurants play an integral role in the Amazon Restaurant Delivery business strategy,” according to a current job posting for a business development position. The listing goes on: “Amazon Restaurants is seeking an entrepreneurial, results-oriented Technical Business Development person to lead negotiations with the largest 200 restaurant brands such as Applebee’s, P.F., Chang’s, Red Robin and point of sale (POS) brands such as NCR.”

A few locations of national restaurant brands such as Subway, Firehouse Subs, Five Guys, Applebee’s, and Which Wich are already on the Amazon Restaurants platform. However, based on our review of restaurants available in each city currently, the large majority are local brands.

Last summer, Amazon announced the launch of Amazon Pay Places, a service that enables select QSRs running the Clover POS to accept takeout orders via the Amazon app. Amazon says it charges restaurants, “10% of each order that’s processed through the Amazon App. This cost covers marketing and payment processing, including fraud protection. Amazon’s marketing may include a variety of paid social media, email, and in-app marketing.” We do not yet know what the specific pricing model is for Amazon Restaurants partners.

Restaurant food delivery is a highly competitive landscape, with a slew of startups operating in the space including DoorDash, Grubhub, Eat24, Caviar, Postmates, and more – in addition of course to Uber Eats (which Uber CEO Dara Khosrowshahi said in May has a $6 billion bookings run rate).

As former Uber growth leader and current Andreessen Horowitz General Partner Andrew Chen articulated recently, the nature of transportation marketplace businesses favors platforms that can keep transportation suppliers continuously in demand throughout the day. While the nature of Amazon’s local transportation demands differ from Uber’s, it does seem generally better equipped to keep more couriers busy more often than the vertical food delivery platforms, and thus to be more economically viable, in the long run.

One potential long-term play for Amazon, given its large volume of both customer relations and inventory of perishable food in its Fresh warehouses and Whole Foods stores, is to enter the virtual restaurant business. A “virtual restaurant” is a restaurant that doesn’t exist for physical customers, but rather appears as a restaurant brand in your food delivery app only. Fulfillment can occur in a space shared with other “virtual restaurants,” perhaps also in a lower-rent location than many traditional retail establishments. Delivery logistics are thus also simplified since the number of food source locations is potentially reduced. (In some cases, restaurant entrepreneurs are creating virtual restaurants inside their physical ones in an effort to grow.)

Another potential option for Amazon long-term is to create “private label” restaurant brands with fulfillment provided by existing third party (physical or virtual) restaurants, somewhat analogous to how it has created private label products in many hardline and softline retail categories. (Given how much Amazon has already aggregated demand, it has more options than most when evaluating how to go about aggregating supply.) We have seen no evidence of Amazon’s intent to pursue either of these strategies yet, but Amazon is at least getting more sophisticated in some aspects of retail food preparation through offerings in its Amazon Go and Whole Foods stores.

For now, Amazon is racing all of its competitors to bring on as many restaurants as it can to the platform, and national restaurant brands are a fast way to gain footprint.