Amazon'S Number Of Its Own Brands Is Breaking Up, Increasing Retail Pressure.

In from October 24th to 27th, the first cowboy themed fashion tannin event, Destination Denim, was sponsored by the Amazon Fashion (Amazon fashion) Department of the US electricity giant Amazon (Amazon) in Berlin. At the event, John Boumphrey, President of Amazon Fashion Europe, did not preach when it talked about the company's fashion strategy, but kept a low profile. But for other fashion retail brands, such a low profile seems to only make them feel a greater threat. Amazon, which has been distributing its own clothing brand, has been a strong competitor.
According to John Boumphrey, at present, there are only 5 brands of Amazon Fashion launched in the European market, the first is the women's banquet Truth & Fable, and then the more popular street brand Find, followed by the introduction of basic brand Meraki and underwear brand Iris & Lilly, and finally the sports fashion brand Aurique.
However, according to Consultation Service Co Gartner, in addition to the European market, the Amazon Fashion Department has 103 clothing brands in the world, 5 in 2014~2016, 54 in 2017 and 44 in 2018. These private brands are different from the exclusive distribution brands of the 105 Amazon released by Gartner last March. The latter is the third party brand exclusive distribution on Amazon platform except for its own physical stores and official website. Amazon Fashion is now the core strategic Department of Amazon. At present, 48% of Amazon's own brand and exclusive distribution brand belong to the Department.
These private fashion brands adopt the same development mode, so the scale is easy to expand. Gartner also revealed that Amazon's European market is currently emulating its US market and is committed to promoting brand development through synergy.
Private brand strategy: Aiming at small and medium sized market and insisting on high performance price ratio
Speaking of market positioning, John Boumphrey said: "our model aims to provide consumers with more choices, higher values and more convenience. Customers tell us that they want more product categories, more styles and colors. These private brands are launched to supplement the platform's third party brand combination, all of which are based on high performance price ratio.
In fact, price positioning is indeed the key to Amazon's own brand. According to Gartner's survey, almost all of Amazon's own brands are located in the entry-level small and medium-sized market, filling the "blank" left by the third party cooperation brands in the low-end market.
After a detailed study of 10 thousand private brand products covering all kinds of products on Amazon's US website, Marketplace Pulse, an e-commerce data intelligence company, found that 49% of the products sold for less than $20, and 12.1% sold for more than 50 dollars. In addition, of all the Amazon's own brands, 47.7% of the brands belong to fashion, shoes and jewellery. 89% brands of SKU are close to 100, and 25% of the brand SKU is less than 10.
Amazon's own brand can be roughly classified into two types according to its name. One is that you can know the brand from Amazon only by looking at the brand name alone, such as home appliance brand Amazon Basics, jewellery brand Amazon Collection, clothing brand Amazon Essentials for women and men, and the other one is called brand without characteristics, such as children's wear brand Simple Joys, Menswear brand Goodthreads and so on. It is reported that the latter group is not as successful as the previous one, and mainly attracts customers through high cost performance ratio.
Juozas Kaziukenas, founder of Marketplace Pulse, said: "some of the Amazon's own brands, especially clothing categories, are targeted at the market demand for specific types of customers or specific types of products, so many of these brands have smaller products. Instead, generic brands like Amazon Basics will try to provide hundreds of thousands of products to customers to win consumers' trust in their single brand.
Coresight, a market research firm, surveyed 1700 clothing consumers in the United States last year. 18.8% of respondents said they were interested in Amazon's own fashion and footwear brands, and 11% of respondents actually bought products from Amazon's fashion department. In addition, young consumers aged 18~29 want to know whether these private brands will open their stores in the future.
Amazon's fashion sector's products are largely viewed as a low cost option. According to the Coresight survey, 32% of respondents said they chose the products under Amazon Amazon fashion department mainly because of the price. Only 11.5% of respondents said their choice was due to the trend of fashion.
A threat to the third party brand?
When asked if he would worry about being viewed as a competitor by other brands, John Boumphrey said he was not worried at all. "We believe that Amazon platform is a good market for all brands, and cooperative brands express the value of this opportunity to reach large consumer groups. We are also developing specific tools to help third parties cooperate in brand development.
But Amazon does affect the interests of other market participants. Some of the respondents to the Coresight survey revealed that their spending on Amazon had eaten up the share of the original clothing budget allocated to other retailers, such as Target (30% of respondents' original choice), WAL-MART (24.9% of respondents' original choice), Old Navy (16.6% respondents' original choice), Gap (8.1% respondents' original choice) and Forever (7% of respondents' original choice). The same share of encroachment may also take place elsewhere in the Amazon fashion sector.
In March of this year, Marketplace Pulse announced that Amazon's own brand would not threaten other fashion brands after studying 23 thousand commodities on Amazon. Juozas Kaziukenas said: "Amazon can launch a product, and then magically make use of data dominance to occupy a subdivision category. This idea is" conspiracy theory ". Everyone likes to mention successful cases, but in fact, most of Amazon's own brands are not successful, and the sales of most products still lag far behind other businesses of the same category.
In recent years, Amason has been making steady progress towards the goal of creating a fashionable empire. In addition to the launch of its own fashion brand, the e-commerce platform has launched a series of new fashion related services and projects, including:
"Pre test and buy" special service Prime Wardrobe
Let fashion leaders cooperate with brands to design exclusive clothing series The Drop project.
Fashion merchandise matching function based on AI StyleSnap
Ordering personal dress matching services monthly Personal Shopper by Prime Wardrobe