This is the TJI Amazon Briefing for May 9, 2019.
We’ve added 11 Amazon Exclusive “Our Brands” to the TJI Amazon Brand Database. The new brands we’re seeing are across electronics, home goods, baby, and apparel.
The new brands are:
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As it continues to expand its portfolio of private label brands and product categories, Amazon has just launched a new private label women’s clothing brand called The Drop, we are seeing.
Currently 3 items are listed under The Drop brand:
Amazon describes these items as “wardrobe-essential,” “classic,” and “perfect for everyday wear.” Like many other (but not all) Amazon private label brands, the items are described as “An Amazon Brand” on their product detail pages.
Amazon sells a variety of women’s clothing lines under its portfolio of private label brands. The Drop has been added to the TJI Amazon Brand Database.
Three weeks after Amazon opened Amazon Go #11, its third store in San Francisco, Amazon has just opened Amazon Go #12, its first store in New York City.
The newest Amazon Go is located in Brookfield Place, formerly known as the World Financial Center, in the Battery Park City neighborhood. It’s a large complex across from the World Trade Center. Rumors of the store first surfaced back in October.
This Amazon Go location accepts cash, after Amazon faced backlash over discrimination concerns. It’s about 1,300 square feet, so close to the “standard” store format, compared to the 450 square foot version Amazon is testing in one location in Seattle.
Overall, Amazon continues to roll out its Amazon Go food stores primarily in corporate urban centers, focusing on the grab-and-go use case that most capitalizes on the efficiencies afforded by the computer vision technology that enables the Amazon Go experience.
The TJI Amazon Physical Retail Map has been updated with this latest opening.
Just a few weeks after we covered the expansion of Amazon Shipping, Amazon is shaking up the freight brokerage industry with the launch of Amazon Freight, a new digital freight brokerage offering substantial discounts to market rates. FreightWaves broke the news.
We do not yet know what portion of trucks available for booking on the service are Amazon owned versus owned by others in Amazon’s logistics partner network.
Given its scale, we think Amazon is already one of the largest freight operations in the US purely through the management of its own supply chain. Amazon ships goods coming in via ocean freightliners as well as between its fulfillment centers using both its fleet of trucks and trailers and others’ as needed.
The launch of Amazon Freight follows a pattern we’ve seen from Amazon over the years. First, Amazon invests in its own infrastructure as a way of creating a sustainable competitive advantage. (For example, Amazon’s own fulfillment centers/FBA infrastructure and AWS.) Then, having invested large sums into these systems, Amazon opens them up for third parties to pay to use, both in order to recoup costs and over time perhaps even earn some margin — in the process continuing to invest in the systems, leading to an even greater competitive advantage.
A larger Amazon Freight system will also likely offer Amazon some insulation against the price volatility of using third party freight services, particularly around the holidays when Amazon volume spikes. Now, Amazon could let third parties fund a larger fleet throughout the year, and then potentially just take over more of that capacity itself in November and December.
Per Freightwaves, Amazon’s rates are 25 to 33% lower than typical contract rates offered on routes out of Connecticut, Maryland, New Jersey, New York, and Pennsylvania. So, it appears Amazon is willing to run this business at little to no margin or at a loss in order to gain market share and ramp up the flywheel on its freight marketplace.
Ultimately, it was just a matter of time until Amazon opened this up, and we generally expect Amazon to become a meaningful marketplace for third party freight capacity in North America over the coming years.
Here’s a roundup of selected TJI Research citations from across the media world for the week ending April 26, 2019:
As Amazon continues to expand its private label food and beverage efforts, it has for the first time launched private label salsas, vinegars, and mustards, we are seeing.
Four salsa products have launched under the Solimo brand. They are:
In addition, four oils and vinegar products have launched under Amazon’s Happy Belly brand:
Finally, Amazon has also launched three mustard products under its Happy Belly brand as well:
Following our findings in recent weeks that Amazon was launching private label milk, dairy, energy drinks, and coconut water products under its Happy Belly and Solimo brands, we have been observing signals that Amazon is planning to further invest in and expand its private label food and beverage offerings in the form of new job posts focused on these roles.
Amazon has been growing its private label food & beverage offerings under a portfolio of brands, including Happy Belly, Solimo, AmazonFresh, and Wickedly Prime. The selection offered within these brands has significantly increased over the last several months.
Amazon now sells “Our Brand” items under 130+ private label brands and 400+ Amazon Exclusive brands. For more on Amazon’s private label efforts, subscribe to the TJI Amazon Briefing and check out the TJI Amazon Brand Database.