Following a strategy change, the top position in the search results is reserved for products from Amazon’s own brands – provided the group has offers that match the search.
More and more often, the first position in Amazon search results is a private label of the Seattle company. The competition feels disadvantaged, reports Pro Publica. Because the top positions in the results of an Amazon search are often filled by paid product placements. Amazon has recently given up this income in favor of selling products from the company’s many own brands.
According to data from Pro Publica Amazon currently has 45 own brands and sells a total of 243,000 different products. Market research institute Coresight Research estimates that private labels are playing an increasingly important role in the overall strategy at Amazon.
Amazon confirmed to Pro Publica that the company has made a strategy change: “Like all retailers, Amazon regularly makes decisions about how to use space in our online store based on a variety of factors that focus on what customers are doing find most helpful, “said an Amazon spokesman. In the course of this, a merchandising placement was introduced.
Amazon is changing its strategy
According to Pro Publica’s observations, this merchandising space is always the first search result and is used by Amazon’s own brands if there are any that match a search result. Amazon justifies the move with the great popularity of its own brands: “Amazon’s own brand products have on average higher customer ratings, lower return rates and higher repeat purchase rates than other comparable brands in the Amazon shop,” the company says. Therefore, like other retailers, Amazon emphasizes its own brands in promotions and marketing.
The change in the labeling of this merchandising function had been planned for many months, said Amazon. The fact that it coincides with the corona pandemic is a coincidence.
In contrast to the competition, Amazon benefits from the fact that the company does not have to pay anything for the top placement of its own brands. Many brands pay between 10 and 30 percent of their sales to Amazon in order to be as high up as possible as a search result.
Amazon search results high up are preferred
Many who search for products on Amazon’s website, after observing analysts, decide for products that are as high as possible in the search results. By using the first placement for Amazon’s own brands, Amazon gains an advantage over the competition.
Amazon’s move is defended by Randall Fields, CEO of retail consultancy Park City Group. “They don’t do anything that other supermarket chains don’t,” says Fields. In the supermarkets too, own brands are prominently presented on the shelves and sales areas. However, Fields admits that the extent of Amazon is “huge”.
Because in all of this, Amazon’s position in online trading plays a decisive role. Almost 40 percent of sales in US online retail are currently accounted for by Amazon. And many sellers and suppliers use Amazon as their primary or sole sales platform. These providers then get problems when their offers have to compete against Amazon’s own brands that are so prominently placed.
The author of the article is Ingo Pakalski.