Episode 20 - How Can National Brands Compete with Amazon’s Private Label Brands?
Amazon is providing more competition than ever with its own brands
It is impossible to deny that, in order to make the most of ecommerce sales, national brands need to be selling on the Amazon platform. Amazon is now providing more competition than ever before with its own private labels. Amazon Basics alone raked in nearly 400 million in revenue last year, and those numbers are on the rise. Yes, national brands should be competing directly, but how should they go about taking on a giant like Amazon?
Today, we have with us our industry thought leader, Danny Silverman, from Clavis Insight. Clavis is committed to helping brands protect and enhance brand equity through its powerful analytic tools and targeted growth strategies. As the VP of Business Consulting Services at Clavis, Danny has garnered experience with over a dozen global manufacturers as they battle over ecommerce market space. Due to his range of experience and considerable data on the subject, Danny is the perfect person to help us tackle what seems to be a daunting issue for many national brands. Though the task might seem impossible, Danny is confident that his strategies will allow national brands to successfully compete with Amazon’s private labels.
Danny begins today by showing us exactly how private label brands have affected national brand growth to date. Data shows that the private labels are only growing in popularity as Amazon’s name begins to take on the “halo effect.” Amazon no longer hides behind private labels that conceal its name. Instead, Amazon Basics has grown to be a powerhouse and a household name. Even the acquisition of Whole Foods tells us that Amazon is more committed than ever to making its own labels outperform any other national brand. The core threat that brands will be facing is that Amazon’s strategy in all of this is data-driven. No national brand will have as much raw data at its disposal. Danny will describe how within its own private labels. So far, this strategy is working well.
What can a national brand to in the face of Amazon’s existing brand strength and wealth of data? Danny’s best practices all involve strategies that will build brand equity. You need to have content that builds consumer trust. You need to be promoting your brand story. Danny agrees with us at Bobsled that headline search ads are an incredible way to gain the top spot in any category. Once your brand is associated with a personal level of trust, you can enter the ring with Amazon.
- Learn how Clavis is collecting data and insights on how brands are interacting in the ecommerce space.
- Danny weighs in on the analytics provided on vendor central, and what Clavis is doing to improve upon what is available.
- Brick and mortar national brands are more accustomed to the battle against private label, but they do not have to deal with the counterweight of data-driven promotional banners and targeted marketing.
- Amazon’s brand has strengthened so that Amazon Basics is taking over all other private labels.
- How the acquisition of Whole Foods was an unprecedented and powerful move for Amazon’s private labels.
- The major threat to national brands is that Amazon has so much data available to them about what works.
- National brands really do not have a choice about whether or not they want to sell on Amazon.
- Danny advises brands to keep building brand equity and brand trust.
- National brands do need to play the search algorithm game.
- Smaller brands can be utilizing AMS to gain key ad placements.
- You need to be establishing your brand story.
Mentioned in this Episode