It’s about time! That was my feeling two weeks ago when Amazon FINALLY expanded their “Happy Belly” Private Brand line beyond coffee to now include nuts and trail mix. Both the pace of SKU expansion and sales for Amazon Consumables Private Brands have been far more sluggish than I expected.
Let’s back up. Amazon has been planning Private Brand expansion for years now. Most notably was the launch of Amazon Elements diapers that were rapidly pulled back due to poor customer reviews. Now, their Private Brands seem to have been stalled again. Why? The gradual expansion likely corresponds with: (1) poor initial customer reviews during test phases; (2) slow customer adoption of existing products; and/or (3) internal strategy decisions at Amazon. One thing is certain: Amazon is being very careful to avoid another false start like they had on Amazon Elements Baby Diapers.
Sources tell us that Amazon products are undergoing a far more rigorous testing process than was previously performed. Testing involves customer focus groups, surveys, in-home trials, and pre-launch production tests of the actual products. If a product fails at any stage, it will pull before it reaches Amazon’s virtual shelf. These same sources tell us Amazon’s Laundry Detergent was pulled because of these failed tests.
Now, some products have passed tests and launched — but remain rather small in sales. The most seasoned product “Amazon Elements Baby Wipes” launched last year and now holds ~9% category Market Share … far below the typical 20-30% penetration for Private Brands in US categories. Of the new products launched this year (Coffee, Baby Food and Nuts) the rank order is:
1 – Happy Belly Coffee is the best seller with peak weeks just over $30K in sales. (Quite lackluster in its category)
2 – Happy Belly snack items are off to a slow start, never selling more than $5K / week.
3 – Mama Bear baby food is in last place, selling ~$2K / week, even after being in market for over 8 weeks.
Despite lackluster results, Amazon continues to add support to their products with Amazon Gateway (e.g. Home Page) advertising for Mama Bear and “Hero Quick Promo” (HQP) on complementary products. Amazon has also “search optimized” their products with an average of 12 title and content changes per item in the last 6 weeks. This “earn your keep” is creating a more level playing field vs the prior strategy during their “Elements” launched that forced the diapers and wipes to the top of search.
Yes. Amazon Consumables Private Brands are off to a slow start… My two cents: Don’t let this fool you. Remember books? Videos, Electronics? Amazon is famous for slow starts followed by incredible innovation. They will find a way to succeed.