How Much of the Digital Shelf Does Amazon Own?
The Rise of Amazon Private Label
In the face of scrutiny from public officials calling for the breakup of tech giants, Amazon has reportedly scaled back on aggressive advertising tactics for its private label brands. Nearly half of all e-commerce sales now occur in the Amazon marketplace, and many sellers believe that Amazon leverages its power in the e-commerce landscape to promote in-house products.
Amazon has been observed prioritizing its own brands across its website increasingly in recent months, promoting them to prominent positions in search results with headlines such as “Top Rated from Our Brands” and under competitors’ listings with a link to a “Similar Item from Our Brands.”
Amazon has more than 120 private label brands at present, with nearly all of these having come into existence in the last three years. In addition to in-house products, Amazon employs other methods to acquire exclusive offerings. The platform offers manufacturers the chance to join the “Amazon family of brands” with products made exclusively for sale on the platform. Presently, Amazon has slightly over 300 of these third-party brands. While Amazon asserts that these offerings are to provide customers a larger selection of high-quality and affordable products, they additionally offer the company better profit margins, enhance supply chain management, and pressure rival brands to lower prices to remain competitive.
Discovering Amazon's Share of Voice
In an effort to better understand Amazon's promotion of private-label brands, we leveraged Searchbox data to examine results for products in the binder category. Examining top brands’ share of voice among sponsored products, our data illustrates the rise of AmazonBasics as a major competitor in the binder category with share of voice rising from 0% to a high of 23% over a four-month period. Sponsored share of voice falls in early April, which aligns with the timing of reports that Amazon is scaling back on the promotion of private label following criticism.
These findings contrast those in organic share of voice for binders, in which share of voice remains relatively constant, hovering between 5% and 15%.
Although Amazon seems to be taking steps to promote its own products less than before, their presence on the platform remains extensive. For example, nearly a month after reports of the company scaling back on advertising were released, a search for "binders" on Amazon will often yield advertisements for AmazonBasics, displayed below.
End of Page Results Ad
What's Next for Amazon Private Label?
While increased scrutiny on Amazon's power in the e-commerce space seems to be forcing the company to pull back on promotions of its private label brands, the role that these products will play in Amazon's future remains uncertain. As both a direct seller and an online marketplace, Amazon is faced with the challenge of providing customers with the largest selection of high-quality, affordable products while promoting sales of an ever-growing portfolio of private label products.
One theory is that Amazon will diversify its private label by steering away from the development of products and focus on "Amazon Exclusives," or partnerships with labels to sell exclusively to Amazon. We will have to wait for the data to see what the effect of these exclusive partnerships will have on the digital shelf for non-exclusive brands.