ESM: European Supermarket Magazine is proud to launch 'The A-Z Of Retail', a new online-only series that will focus on the retailers, suppliers and individuals making the news each week.
Earlier this week, banking giant JP Morgan suggested that Amazon could soon become the world’s first ‘trillion-dollar company’, such are the myriad of growth opportunities the former online bookstore is investing in.
No wonder, then, that retailers – and increasingly brand manufacturers – are nervously keeping track of what the ‘great disruptor’s’ next move might be.
Within the past few days, industry analysts have been lining up to debate what the next chapter of Amazon’s quest for retail domination might involve, with US giants Target, Walmart, Macy’s, J.C. Penney, Kohl’s, Lowe’s and Costco all within the retailer’s sights, depending on who you listen to.
Its reported pursuit of Target has been arguably the most discussed, with Gene Munster, managing partner of the venture capital firm Loup Ventures suggesting that Target’s “shared demographic and manageable but comprehensive store count” make it an ideal offline partner for Amazon.
Target’s share price also enjoyed a welcome boost on the back of the suggestion, hitting their highest level since last March.
Lest we forget, the rumours circling around Amazon’s next move come barely half a year on from its groundbreaking takeover of Whole Foods Market in a $13.7 billion deal.
This marked the biggest transaction ever for Amazon and sent shockwaves through the online and brick-and-mortar retail industry as the company added over 400 stores in the US, Canada and the UK to its e-commerce portfolio.
Private Label
But aside from its real estate ambitions, Amazon has busily been crafting a new front in its battle for retail superiority: private label.
The company has had its most successful year yet with regards to private label sales, according to data by the e-commerce analytics firm One Click Retail.
The data showed that the company generated sales of almost $450 million from its own brands in 2017, which include Amazon Basics, Pinzon, Amazon Elements, Happy Belly and Whole Foods’ 365 Everyday Value food range.
Over $400 million (85%) of those sales were from its home-care brand Amazon Basics, which includes everything from batteries to diapers.
The online retailer has even expanded its private label range to include Rivet furniture, Stone & Beam furnishings, and active-wear brands Goodsport, Peak Velocity and Rebel Canyon.
As the retailer’s ‘offline’ foothold increases so this new private label front is likely to cause a few sleepless nights at companies such as P&G, Unilever and Kimberly-Clark. In fact, just last October, Kimberly-Clark said that its volumes in infant and child care were lower by mid-single digits due to lower Huggies diaper sales.
With Amazon becoming an increasingly prominent player in both this and other key grocery categories, both major suppliers and indeed traditional retailers will likely have to fight harder in the future to retain their market share.
© 2018 European Supermarket Magazine – your source for the latest retail news. Click subscribe to sign up to ESM: The European Supermarket Magazine.
