Seattle-based Amazon recently revealed plans to open a new line of grocery stores this year. According to Matt Pace, senior director of client insights at 1010data, given how rapidly the retailer is also expanding the breadth of its private label business, it’s likely that these stores will feature a lot of Amazon products, alongside a limited selection of national brands.
In an article written for Store Brands’ sister publication, Progressive Grocer, Pace says that while private label is a growing retail trend, with grocery as the trailblazer, the scale of Amazon’s platform gives it a unique competitive advantage and opportunity to drive shoppers from online back to physical retail.
For grocers that stock consumer packaged goods (CPG) competitors like Procter & Gamble, Kimberly-Clark and Unilever, Amazon’s continued private label onslaught is hard to ignore, according to Pace. Case in point: Solimo. Launched with little fanfare less than a year ago, the “everyday goods” brand, with center store products ranging from disposable cups to multivitamins to dog food, now generates more than $6 million in monthly sales on Amazon as it adds SKUs across an ever-widening number of categories. Additionally of note, in dollar volumes, sales have been approximately doubling every quarter.
With home-grown brands like Solimo, Amazon can quickly develop and launch new items powered by its precision, data-driven knowledge of what sells best across its platform, Pace writes. This allows it to test and learn, measure consumer demand and feedback, and adjust.