Deep Dive: Slicing and Dicing Amazon’s Private-Label Offering
Amazon is not just moving into newer categories, such as apparel, home furnishings and grocery; it is also building its own suite of brands in these categories. In this report, we take an exclusive deep dive into Amazon’s US private labels, using a detailed, proprietary dataset that aggregates information on nearly 7,000 such products.
A number of studies and articles have noted the many private labels Amazon has launched over the years. However, simply taking note of its private labels does not necessarily indicate the depth (number of products) or breadth (category presence) of the offering; nor does it give any indication of consumer reception, sales volumes or pricing.
In collaboration with competitive intelligence provider DataWeave, we have aggregated a number of metrics on 74 known Amazon US private labels. In the sections that follow, we slice and dice that data to provide information on:
The focus of our research is the 74 private labels identified by research firm L2 and published by tech news website Recode in April 2018. We list these 74 brands in full at the end of this report. This report focuses on summarizing key findings; specific data points are available on request.
We offer two major takeaways from our research:
1. Amazon Offers Almost 7,000 Private-Label Products
Amazon’s private-label offering spans 6,825 products across 74 identified private labels. Almost 5,000, or three-quarters, of those private-label products are in apparel—split across men’s, women’s and children’s clothing and footwear. Home and kitchen, which includes products such as towels, bedding and cookware, is the only other category with a very substantial offering.
2. Most of Amazon’s Private Labels Offer Fewer than 100 Products
The majority of Amazon’s private labels offer fewer than 100 products. We think this underlines the segmented strategy that Amazon is pursuing in apparel: most of its fashion brands are designed to target a specific type of consumer or serve demand for a particular product type.
As measured by number of products, seven of the 10 biggest private labels are apparel brands, and this reflects the overall strength of that category in Amazon’s private-label offering. Yet, only one of the biggest four brands is an apparel brand—Lark & Ro. This implies that Amazon’s strategy in fashion is to build smaller, more specialized ranges than it does in categories such as home or electronics, where brands such as AmazonBasics and Rivet include a large number of products.
Below, we chart the number of brands by the number of products offered within each brand; we also show what proportion of the total private-label offering each range comprises (so, for example, the nine brands that offer fewer than 25 products contribute 2.1% of all Amazon’s private-label product offering, while the 26 brands offering 25–50 products contribute 14.4% of the total private-label offering).
3. Amazon’s Average Apparel Product Sells for $38
The average item of Amazon private-label apparel sells for $38, a price that implies a midmarket positioning. However, that average conceals a wide range of price points that reflect Amazon’s tiered proposition spanning budget to high-end; see the second graph below for average price per brand.
Moreover, childrenswear and accessories depress the average apparel price, while adult footwear pushes it up. For the core categories of women’s and men’s clothing, the average private-label item is sold for around $40 and $30, respectively. We show selected women’s and men’s clothing subcategories in the chart below.
Underlining the stratified nature of Amazon’s fashion offering, we recorded substantial differences in average selling prices between its private labels:
4. Customers Give Amazon Private Labels Four Stars Out of Five
The data so far have illustrated what Amazon offers. But what are customers buying and how do they view Amazon’s private labels?
In the absence of hard sales data from Amazon, one potential indication of unit sales is the number of customer reviews each product and brand receives: a greater number of reviews implies higher unit sales. We recognize that this could be skewed by the type of product: for example, parents may be passionate about providing reviews of baby products; although, as we show below, boring products such as batteries generate a lot of reviews.
At the same time, customer satisfaction with Amazon’s private labels can be measured by the average star rating customers leave in those reviews. We chart both sets of data in the graph below.
High-volume grocery-store items are among the most-reviewed of Amazon’s private labels, though the ranges are often very limited:
High numbers of reviews for Pinzon by Amazon and AmazonBasics suggest that consumers are trying Amazon’s brands for selected nongrocery, nonapparel categories:
Number of Products per Category: Apparel and Home Products Dominate the Offering
We have already noted the prominence of apparel and home goods in Amazon’s own-branded offering. We provide a full breakdown of categories below, and this shows the long tail of Amazon’s category presence.
Amazon’s Private-Label Offering in Clothing, Footwear and Accessories
Apparel is the cornerstone of Amazon’s private-label ranges. Below, we break down this apparel offering by subcategory.
Womenswear accounts for almost 72% of all Amazon’s apparel private-label products, a far greater proportion than its approximate 50% share of the total clothing market.
Number of Products per Brand: AmazonBasics and Lark & Ro Lead the Pack
Finally, we offer a roundup of all 74 identified private labels, ranked by number of products and noting their category presence.
We conclude by emphasizing that the dominance of apparel brands reflects Amazon’s segmented approach to fashion: it has launched brands that are designed to focus on particular subcategories, such as sleepwear or denim, or resonate with a particular consumer segment.
We break down the brands into two tables, below.