Amazon Expands Program Offering Its Own Brands
01 Juillet 2009 - 10:18PM
Dow Jones News
Amazon.com Inc. (AMZN) is using its muscle as the world's
biggest online retailer to put its own products in front of
millions of consumers.
Amazon last week added a line of cutlery and tableware to its
burgeoning Pinzon private-label brand. The line's new products are
the first time Amazon has teamed with an industry "name," in this
case chef and author Tom Douglas, who is based in Amazon's Seattle
hometown.
Amazon's other brands are Strathwood outdoor furniture, Denali
tools and Pike Street linens.
Amazon appears inclined to expand the offerings, in terms of
both brands and merchandise within them. "We will certainly look at
areas to expand, and different ways to do that over time," said
Chris Nielsen, vice president of home and garden at Amazon.
Nielsen declined to elaborate on a strategy that puts Amazon in
the position of competing with retailers and manufacturers that
sell merchandise through its site.
Amazon's lines are positioned as being of "high quality and
great value," Nielsen said.
Amazon is believed to be the first online merchant of any girth
to take the approach of brick-and-mortar retailers like Wal-Mart
Stores Inc. (WMT), Target Corp. (TGT) and Best Buy Co. (BBY) and
carry its own lines along with brand names. "They are of a size
that they can look at off-line strategies," said Scot Wingo, chief
executive of ChannelAdvisor, a software firm that helps retailers
sell online.
Amazon is already being compared with Wal-Mart, with research
firm Cowen calling Amazon the "next-generation Wal-Mart."
Big retailers are increasingly offering lower-costing private
products as a way of appealing to recession-strained consumers and
also improving margins.
Nielsen said Amazon is not taking a greater private-label
approach because of the recession and that the lines began in 2004
with a few items under the Strathwood name and have been
growing.
"The private-label business, as it currently stands, will be a
minor contributor to revenues in the near term, but will be another
meaningful component to continue driving retail market-share gains
over the next few years," said Piper Jaffray analyst Gene
Munster.
Although they might be uncomfortable with the private-label
program, Wingo does not expect much backlash from retailers and
vendors that sell through Amazon. "You can't pull out of the
Wal-Mart of the off-line world," he said.
-By Karen Talley, Dow Jones Newswires; 212-416-2196;
karen.talley@dowjones.com