New Amazon Exclusive Home Decor Brand “Now House by Jonathan Adler” Launches

Amazon launched a new exclusive home decor brand with designer (and design company) Jonathan Adler yesterday. The companies are positioning the brand, called “Now House by Jonathan Adler,” as, “Fresh, fashionable, photogenic, and stylish AF,” and as “Amazon’s first exclusive designer collection for the home.”

Amazon and Jonathan Adler made a big PR push for the launch as well, with many pop culture, fashion, and design outlets covering the news. Reviews thus far are very positive.

There are 135 products in the lineup at launch, including a variety of home decor items like pillows and canvas art as well as furniture from sofas to side tables.

Amazon is expanding the breadth of its private label and exclusive brand offerings. Now House by Jonathan Adler reflects that the company wants to add lines that appeal to customers with different design sensibilities and budgets. We expect the company to announce additional new exclusive brands in the coming months that expand Amazon’s selection further.

Below: Now House by Jonathan Adler Terrazzo Globe Vase, Priced at $78.00

Amazon Launches Several AmazonBasics Private Label Gaming Accessories

Continuing its expansion in to private label electronics products, Amazon has launched several gaming accessories under its AmazonBasics brand.

The new items include:

Vine reviews are still coming in for most of these items, though the Pro Gaming Headset has no reviews as of yet. The Chat headset has some Vine reviews going back to the summer, but is still getting Vine reviews as of last week as well.

These new products mark Amazon’s biggest push into private label gaming accessories and hardware that we’ve seen to date.

Currently, searches for gaming headsets in Amazon’s US store put products by Logitech and Onikuma at the top of organic search results. Serain and SteelSeries headsets are the top sponsored products in our spot checks. Amazon also includes “Expert Recommendations” on gaming headset searches from BestReviews.

Amazon has launched a hundreds of private label electronics products and accessories under its AmazonBasics brand, from cords and cables to cases and covers.

Follow TJI as we continue to track Amazon’s private label efforts.

A Look at Amazon’s Growing Advertising Sales in India, China, and Across Asia

Amazon’s growing advertising business has raised a lot of eyebrows this year. The company said* it did about $2 billion in advertising revenue in the second quarter of 2018, and that number is generally expected to grow healthily as we approach the holiday season. Ad loads on Amazon search results pages appear very healthy, and Amazon has been attempting to make it easier for advertisers and agencies big and small to spend money on Amazon’s variety of advertising products by simplifying its advertising product branding.

We haven’t heard as much about Amazon’s advertising sales efforts in Asia, but we’re starting to. According to a report by India’s Factor Daily, Amazon ad sales in India are approaching $100 million (we assume this means annual run rate).

Online retailer Amazon has quietly built itself a high margin digital advertising business in India which is closing in on revenues of nearly $100 million, about 5% of money spent online by brands in India… “Amazon doesn’t have its own ad network and agencies don’t yet understand how to use advertising on an e-commerce platform,” said an Amazon executive who did not wish to be named as he is not authorised to speak to the press… Nearly 90% of Amazon’s advertising business in India currently comes from the programmatic and direct sales route.

Amazon is one of the most widely visited web services in India. According to Alexa.com (Amazon’s original and now lesser-known “Alexa” service, which tracks web traffic stats), Amazon.in is the fourth-biggest site in the country.

Ad loads on Amazon.in for popular queries are on par with those in the US. As one example, here are search results pages for “polo shirt” in India and the US, respectively (side note, Amazon private label brands are prominent in both search results as well):

Sponsored results for “polo shirt” on Amazon.in:

Sponsored results for “polo shirt” on Amazon.com:

Amazon continues to hire advertising support staff in Bangalore and Chennai, including those supporting advertisers in other parts of the world, such as Italy and China.

We’ve heard even less about Amazon’s advertising sales efforts in China, Japan, Singapore, and the rest of Asia. Anecdotally, ad loads for “polo 衫” on Amazon.cn show decent ad loads. But perhaps more telling of where Amazon hopes to go with its Chinese advertising efforts is Amazon’s current plans to ramp up its advertising sales staff in the country targeting Chinese advertisers.

Per Amazon.jobs, Amazon is hiring 18 advertising account executives and onboarding specialists out of its Shanghai and Shenzhen offices. These positions reflect the growing number of Chinese brands that Amazon is targeting to bring onto its platform – to reach customers both in China and around the world. Amazon is looking for people with, “Experience working with China-based brands.” As the listings state:

The Amazon Advertising team helps CN-based advertisers to reach Amazon customers globally: on Amazon, across our other owned and operated properties, on other high-quality destinations across the internet, and on millions of Kindles, tablets, and mobile devices.

In addition, Amazon’s onboarding specialsts are focused on helping Amazon’s self-serve/CPC advertising customers ramp up their efforts:

Sponsored Products and Sponsored Brands are cost-per-click (CPC) self-serve ad programs in the Amazon Advertising world. In support to the Amazon Advertising’s business, we at Ad Success Team (AST) are building a group of energetic and highly motivated Associate Onboarding Specialists. As an Associate Onboarding Specialist, you will be responsible to help equip them to identify the Advertising business opportunity, review their product listings, create advertising campaigns and help them adopt high value actions on their account to influence their success in advertising.

In Meguro, Amazon Japan is staffing up its ad sales efforts as well, including Head of Vertical Sales for Amazon Media Group, Manager of Campaign & Creative Management, and several Account Executives. Amazon is staffing Japanese advertising onboarding specialists out of Shanghai as well.

Meanwhile, Amazon is continuing to hire ad sales staff in the US (primarily in New York) and Europe (primarily in London, Paris, and Munich), managing accounts, self-serve advertisers, and continuing to build Amazon’s DSP operation.

* Notes on chart above and Amazon’s filings:

  • In 2017 filings, Amazon’s footnote on “Other” revenue said: “Includes sales not otherwise included above, such as certain advertising services and our co-branded credit card agreements.”
  • In 2018 filings, Amazon’s footnote on “Other” revenue said: “Primarily includes sales of advertising services, as well as sales related to our other service offerings.”
  • Starting in 2018, Amazon said it made an accounting methodology change that resulted in an increase in “Other” revenue of $560M in Q1 2018: “Service sales also increased by approximately $560 million due to the reclassification of certain advertising services that were previously classified as a reduction of cost of sales.”

Follow TJI as Amazon continues to evolve its advertising products and the way it works with advertisers and agencies around the world.

New Amazon Exclusive Seasonal Clothing Brand “Celebrate 365” Launches

Of the few hundred Amazon private brands that have launched, only a couple have been focused on highly seasonal apparel. For example, Amazon’s Ugly Fair Isle private label brand is focused on Christmas and Hanukkah themed sweaters.

Now, a new Amazon Exclusive brand called Celebrate 365 has launched that is exclusively selling Halloween themed shirts. For example, this Skull Ice Cream T-Shirt is on sale for $19.99. None of the items have any customer reviews yet.

It’s to be determined if Celebrate 365 will create seasonal clothing throughout the year, but one might surmise so based on its name. (Thus far, Ugly Fair Isle has stuck to winter holiday themed items.)

Seasonal retailer Spirit Halloween is known for its practice of launching 1,000 Halloween themed retail stores each fall. The practice works well when real estate is more readily available. In a stronger economy, finding seasonal real estate can be more challenging.

2 New Amazon Exclusive Food and Grocery Brands Identified

As we continue to track Amazon’s private label and exclusive brand efforts, we have identified 2 new Amazon Exclusive apparel and accessories brands that have recently launched. Amazon Exclusive brands are labeled “Our Brands” by Amazon but are owned by third parties.

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Amazon Planning to Expand Its Private Label Efforts in Japan

While much of the focus on Amazon’s private label brand initiatives is on their efforts in the United States, Amazon has been growing its private label and exclusive brand offerings across its European and Asian markets as well.

Now, Amazon is planning to invest in additional expansion of its private label efforts in Japan, as evidenced by multiple job listings and a growing number of private label goods appearing on Amazon Japan.

As of today, AmazonBasics remains the broadest private label Amazon has launched in Japan in terms of SKU count by far. However, recently Amazon has also launched its Happy Belly (grocery and beverage), Solimo (household goods and foods), Mama Bear (diapers), Wickedly Prime (grocery), and Presto! (household goods) brands as well.

Like it does in other markets, when a search on Amazon Japan includes Amazon private label items in the results, it highlights those items with a gray box and “Our Brands” label. Here are a few examples of how these tiles look on Amazon Japan for Solimo tuna (“sea chicken”), Mama Bear diapers (“baby pants”), Happy Belly water, and Presto baby wipes.

  

We would not be surprised to see Amazon introduce private label and exclusive brands specific to the Japanese market, as it has done in other regional markets around the world already.

Based on several job listings posted earlier today, Amazon is planning to invest in significant staff expansion to power its growing private brand efforts in Japan. These follow several job listings targeting Amazon’s growing Japanese grocery efforts a few weeks ago.

The new Amazon Japan private brand job listings include:

  1. Sr. Category Manager, Private Brand
  2. Sr. Category Manager, Consumables Private Brands
  3. Product Manager, Private Brand
  4. Marketing & Customer Insight, Private Brand
  5. Head of Hardlines Private Brands
  6. Instock Manager, Private Brand
  7. Instock Manager, Consumables Private Brands

The above job postings note:

“Amazon is looking for an experienced, talented and enthusiastic Senior Category Manager for Consumables Private Brands (CPB) to manage selection expansion for number of categories for Private Brands business for Consumables in Japan.”

“Private Brands is a long-term growth opportunity for Amazon. So far, Amazon JP CPB has launched its brand 5 brands (Happy Belly, Wickedly Prime, Presto!, Mama Bear, and Solimo) as Amazon owned brands within Consumables, and are also looking to expand our foot-print into new categories, including Amazon-exclusive vendor owned brands under Amazon Accelerator program.”

“Amazon Basic is now considered strategically important at the global level, and it is expected to be a big Growth Potential as the Priority Growth Division.” (Disclaimer: this quote is a Google Translation from the listing’s original Japanese)

“The Amazon Consumables Private Brands team is creating a global portfolio of premium consumables products to meet Prime customers’ daily needs.”

“Amazon is looking for an experienced, talented and enthusiastic team leader of Hardlines Private Brands to manage selection expansion for number of categories for Amazon’s Exclusive Brands and Private Brands business for Consumables in Japan. As a leader, you will be responsible for managing private brands with the best possible commercial and legal terms. You will also be responsible for hiring and building a high performance team of experienced team members and growing volumes and margins. You will develop a partnerships with retail category teams in Japan and the various functions in Japan and US. Private Brands is a long-term growth opportunity for Amazon. We are also looking to expand our foot-print into new categories.”

Increasingly, Amazon views its private label efforts with a global purview. Amazon wants to increase customer loyalty amongst Prime members through private brands around the world, and ultimately generate increased margins in the long term. It is building a brand portfolio and global infrastructure to support that effort.

Follow TJI as we continue to track Amazon’s private brand efforts in Japan and around the world.

Above image credit: Amazon Japan

The Strategy Behind Amazon’s Private Label Push: Customer Loyalty, Supplier Leverage, and Long Term Margins

Amazon created its first private label brands about a decade ago. But lately, something’s changed — Amazon is ramping up its private label brand portfolio in a massive way. What’s going on? Big picture, we think there are three vectors to Amazon’s private label efforts: customer loyalty, supplier leverage, and long term margins.

A Customer Loyalty Strategy

Consumer products companies have spent billions of dollars over decades to build brand loyalty. Why? Because building brands works: customers with a brand affinity stay loyal over time.

Along those lines, we believe Amazon has decided it is a strategic priority to build customer loyalty and preference through the development of private label and exclusive brand products. In a world with an ever-increasing number of “microbrands” and DNVBs, Amazon is betting that customers who find quality products on Amazon that they can’t get anywhere else will become more loyal to Amazon and spend more on Amazon over time because of their loyalty to those private brands.

From this perspective, Amazon is incentivized to build private brand products in as many categories as possible. This is generally good news for private label manufacturers who have built their businesses serving large retailers like Walmart and Target (and who are now increasingly shifting their efforts to serving Amazon) — though they are more easily replaceable than owners of established consumer brands.

In our view, there’s no reason why Amazon shouldn’t offer a private brand option (if not multiple private brand options) for most product categories it sells. Some will succeed, and others won’t. In addition to creating loyalty to private brands, the overall effect of increased selection and value should strengthen Amazon’s position as a first-stop destination in consumer shopping habits, driving traffic and sales for all Amazon vendors and sellers.

A Supplier Leverage Strategy

Amazon Prime has built significant loyalty and habit in consumer purchase behavior since it launched in 2005 — not through retail brand loyalty, but through the sunk cost psychology of pre-paid shipping. It’s one of the amazing business accomplishments of our time.

But Prime is not without its vulnerabilities. Chief amongst them: most of the brands that Amazon sells are owned by other companies. The probability that some companies that own the brands that Amazon’s customers have built loyalty to over time might at some point have sufficiently different incentives than Amazon is non-zero.

For example, one fundamental strategy conflict: brands might increasingly feel like Amazon is not offering the differentiation they want for their products on its marketplace.

Amazon aggregating everyone else’s value chain into their channel, while diluting external Brand value in general, is sort of scary… Just wonder when this starts to rub off on already established brands. Amazon wants a Brand-Free future where they hold the keys to the consumer’s purchase point, on their terms. (Jordan Rice, via Twitter)

The question of whether Amazon and other technology platforms have the potential to change the fundamental nature of brand psychology and create a “brandless” future is an interesting one. The increasingly sophisticated private label efforts from Amazon and others will affect some product categories more than others: categories that are more easily commoditized will see faster and greater disruption, while customers will always have enduring affinity for truly differentiated products.

Big picture, there appears to be a sense of urgency at Amazon to build out its private label portfolio as quickly and broadly as it can to accelerate the process of introducing its customers to its own brands so that, in the long run, if some brand owners decide their incentives aren’t sufficiently aligned with Amazon’s, Amazon will be able to fulfill (ideally large portions of) that demand with (ideally very comparable) private brand products to satisfy as many customers as possible. The better private brand alternatives Amazon can create, the more leverage it will have with suppliers.

A Long Term Margin Strategy

Jeff Bezos is reputed as saying, “Your margin is my opportunity.” Given Bezos’ and Amazon’s long term perspective, margins that look terrible to many other businesses can look attractive to Amazon. That steely view has led Amazon to make investments others haven’t.

Once Amazon establishes more of its own brands and builds loyalty to them over time, it should be able to extract attractive gross margins from the sale of those items, especially compared to the low margins it and most retailers usually earn when selling third party brands.

Could Amazon someday even create luxury brands? (And if so, could Amazon even only offer some brands through certain types of its own physical retail stores one day?) Maybe, but first it must prove that it can move beyond low-emotion private label brands like “AmazonBasics” that primarily compete on price and create a portfolio of brands that have sustaining appeal to different customer segments.

If it can, then private label could be a significant source of margin for Amazon over time — that Amazon can then use to invest in its next “low-margin” business.

Amazon Launches Several Solimo Brand Private Label First Aid Products

Continuing its expansion into private label health care products, Amazon has launched several new Solimo brand first aid items.

The new items include:

Vine reviews for Solimo Hand Sanitizer are dated since September, though the rest of the items don’t have any Vine reviews. It’s possible they may in the coming weeks.

This is Amazon’s first private label hand sanitizer product. It also offers hand sanitizer from the Amazon Exclusive Mountain Falls brand, which it also labels as “Our Brand”.

Currently, hand sanitizer searches in Amazon’s US store are dominated by sponsored listings and headline search ads from Purell. Purell is the flagship brand of GOJO Industries, Inc., which is headquartered in Akron, Ohio.

Purell and Mountain Falls dominate organic search results for “hand sanitizer” on Amazon’s US store as well, with Germ-x, Babyganics, Cleanwell, and Bath and Body Works also present.

Amazon is in the process of ramping up its physical retail infrastructure as well. It’s possible that Amazon could stock those stores with first aid items, decreasing the number of trips made to traditional retail drug stores like Walgreens, Longs, Rite Aid, Walmart, Target, and many others.

GNC Launches Amazon Exclusive Supplement Brand, “CHALLENGE by GNC”

GNC, one of the largest retailers of vitamins, supplements, and other health and nutrition products, has quietly launched a new Amazon Exclusive brand called CHALLENGE by GNC.

GNC, which has seen declining revenues over the past two years from $2.68 billion in 2015 to $2.45 billion in 2017, operates over 8,000 stores around the world and over 3,000 in the United States. Amidst changing retail trends, GNC announced earlier this year that it intended to close approximately 200 stores in 2018.

Now the company appears to be trying a new tactic – creating a brand of products exclusively available on Amazon. As an Amazon Exclusive brand, CHALLENGE by GNC is labeled as “Our Brand” by Amazon and included in special promotional real estate in Amazon search results.

GNC has not made any announcements about the new strategy or launch of the new brand that we can find. The company has also not yet responded to our request for comment. We will update if they do.

Amazon is currently promoting the new CHALLENGE by GNC Amazon Exclusive brand in the nutritional supplements section of its US website with ads like the following:

Vine reviews for CHALLENGE by GNC products are dated since September, so it’s possible GNC is waiting to promote the new brand until after some initial reviews come in.

The move signals a possible growing trend of well known brand owners deciding to create new brands or sub-brands for certain product lines exclusively for Amazon. Carter’s currently offers its Simple Joys by Carter’s brand exclusively on Amazon. Iconix now makes its entire Starter brand of clothing available on Amazon as well. We expect to see more of these kinds of moves in the coming months, as Amazon is looking to increase the volume of exclusive brands on its platform.

As always, follow TJI for the latest on Amazon’s private label and exclusive brand efforts.

Perrigo Launches Amazon Exclusive Infant Formula Brand, “Love & Care”

Perrigo, one of the largest manufacturers of private label OTC pharmaceuticals, has launched a new Amazon Exclusive infant formula brand called Love & Care.

It’s the first infant formula Amazon Exclusive brand we’ve seen. Currently, Earth’s Best (owned by Hain Celestial Group), Similac (owned by Abbott Laboratories), Enfamil (owned by Mead Johnson), and Happy Baby brand infant formulas rank the highest in Amazon US search results for infant formula. Plum Organics, Happy Baby, Love & Care, and GoodSense are the top brands advertising on those searches.

While “Love & Care” brand items are not yet showing up with the “Our Brand” label in search results, Amazon is promoting the new Love & Care brand in the baby healthcare section of its US website with ads like the following:

Perrigo has not made any announcements that we can find, and the company has not yet responded to our request for comment. We will update if they do. Vine reviews have started coming in in recent days, suggesting that Perrigo may be waiting to promote the new brand until after some initial reviews come in.

Perrigo filed for the US trademark for “Love & Care” on May 9, 2018. The company also produces the Amazon Exclusive Basic Care brand, which includes a variety of first aid health care products and OTC medicines.

Follow TJI for the latest on Amazon’s private label and exclusive brand efforts.