Amazon is allegedly looking to expand their online footprint and increase competition with other major retailers. They plan to carry out this goal by implementing grocery items into their already well-established selection of private-label brands.
The company introduced their Amazon Elements service, which at first only offered diapers, baby wipes, and changing tables. This service was only available to Prime subscribers, so if you paid $99 a year you would be able to access this service, free two-day shipping, and much more. Although the Elements brand has since stopped selling diapers, it has not stopped the expansion. The online retailer is looking to add cereal, milk, and baby food according to The Wall Street Journals report on Thursday.
To prepare for this expansion, Amazon has already began seeking out trademark protection for multiple categories under their Elements brand. These categories include soup, coffee, pasta, cleaning supplies, and even razor blades. Also according to the Journal, the company is on the lookout for private-label food producers/manufacturers to create partnerships with. TreeHouse Foods which is a prominent private-label manufacturer has evidently partnered with Amazon already.
Amazon is heading in the right step, following behind other well-known retailers such as Wal-Mart, Costco, and Target. These companies have recognized the growing business that selling private-label products has become. It is clear that private-label companies bring in a larger profit than brand-name goods due to spending less on developing the brand and marketing the product.
In fact, US consumers alone purchased $120 billion worth of private-label products in 2014. This is a constant 2.1 percent growth year after year. This was according to a study done Information Resources.
All of the details have not yet been released, but the general idea of this expansion is made clear. Amazon may limit the purchasing of these items to Prime members only. It is also possible that they link these groceries with their grocery delivery service, AmazonFresh.
Amazon Fresh is offered in Los Angeles, New York, Philadelphia, San Francisco, San Diego, and Seattle. This service enables the customer to have fresh groceries delivered to their doorstep. This could range from dairy and meat to fresh produce. Amazon also offers same-day shipping and early morning deliveries on orders over $35 for free.
Amazon has yet to comment on their plans with their Elements brand, but buying Amazon milk online never sounded so futuristic.