Amazon eyes big private label expansion
Amazon is planning to expand its private label assortment in 2018 to include diapers, medications, pet accessories and other goods.
According to a new report from One Click Retail, Amazon is expected to increase its private brand offering of lawn and garden and other household goods this year. The retailer is also poised to expand its assortment of own brand diapers and OTC medicines.
Specifically, AmazonBasics pet carriers, though still in the monitoring phase, brought in $2 million in estimated 2017 sales, a YoY growth of 80%, and produced the top four bestselling pet carriers of 2017. One Click findings reveal that even though all their items are top performers, the brand is only No. 4 in this space because they have too few items available (the category is worth an estimated $16 million).
"The introduction of new sizes and varieties of pet carriers is a major growth opportunity for Amazon, and we expect the expansion could happen any day now," said Spencer Millerberg, CEO at One Click Retail.
After a past failure in the category, Amazon has already collected a lot of data on diapers and has shown their commitment to competing in this space with a month-long 20% promotion in February, according to One Click. With diapers being a major category for Amazon (with an estimated $530 million in 2017 sales), One Click Retail expects Amazon to pay particular attention to this space over the next 12 months.
Currently, Amazon lacks a strong lawn and garden presence in its private brands lineup. In 2014, Amazon released a small set of lawn and garden products under the AmazonBasics brand, with steady sales of about $3 million per year and a gradual growth of 10% YoY.
"In an effort to expand into Lawn & Garden, we expect Amazon to introduce a new line of Patio Heaters this coming Fall to capture seasonal purchases," said Millerberg. "The expansion will likely introduce new styles to the AmazonBasics line such as tabletop heaters and wall hangers."
Amazon's last investment in private label was the August 2017 launch of Basic Care, an over-the-counter medicine brand created in partnership with Perrigo. Basic Care launched with 60 individual SKUs, a larger count than almost all of Amazon's past sample product lines.