Amazon’s latest entry into the private-label grocery sector has captured many headlines over the past few weeks. Amazon will sell perishable items such as nuts, coffees, teas, baby food, and spices along with household items like diapers and detergents under unique brand names: Happy Belly, Wickedly Prime, Presto! and Mama Bear. However, these products will only be available to Amazon Prime subscribers.
Private-label products are nothing new to the grocery business, which has seen dynamic success with these types of products, especially in the last few years. According to the Private Label Manufacturers Association, sales reached an all-time high last year with $118.4 billion in sales just in the United States. A number this large makes it no surprise that Amazon is ready to play the private-label grocery game.
But this isn’t the first time Amazon has tried its hand with private-label products. It has successfully sold non-grocery items such as electronics and home goods. It also previously failed because of quality issues with its Elements brand, which tried to sell diapers and other baby goods.
What does all of this mean for grocery stores?
Grocers should pay attention to Amazon’s progress and also pay attention to their own store-brand programs. Grocers have proven that they can profitably market and sell their private-label products. For AWG member retailers, AWG Brands have a strong marketing presence and support to help retailers increase sales of these brands in stores and online.
It’s also the perfect time to take a look at online shopping options if you haven’t already. Millennials are a large target audience for Amazon. They are online, price-sensitive and favorable towards private-label goods, since many in this age group can’t tell a quality difference between these brands and the national brands. These are all reasons why Amazon could be successful this time around. AWG Marketing/Advertising has worked hard to ensure that all AWG Brands products are photographed for online shopping platforms so that our retailers can sell these brands successfully online, just as they would in the store.
Amazon is trusted because they can reliably deliver products on time that were ordered online at a cheap price. Independent grocers are trusted because they stock and sell quality grocery products with excellent customer service. Combine this with the convenience of online shopping and independent grocers have an advantage. After all, Amazon is known for a selling a variety of everything, but not necessarily specializing in anything. Independent grocers are specialized in quality, freshness, and customer service, among other great traits.