Originally posted on ARCH-USA
Many of Amazon’s private label offerings appear to have launched in the past few months, just in time to capitalize on the holiday shopping rush.
The moment I began hearing about Amazon private labels, I realized that it would begin to shape sportswear. I reached out to noted analyst Matt Powell and asked him about this incursion and he brushed me off. It was at this point I realized that maybe my information and position on how the sportswear market worked was just as valid as Powell’s. I guess it was what happened to my online shop on Amazon that was informing me and not data from POS and other locations. When you have a horse in the race I think it’s a lot more personal and for me Amazon’s private label was a harbinger… a bad thing for the sportswear market long term.
L2 has updated its collection of information and it verifies what I stated in a previous post:
What Amazon understands is that the majority of holiday shopping will be done via search and that apparel is a major item of purchase during the holidays. Both adidas and Under Armour should be paying very close attention to this introduction of sportswear by Amazon. One look at the chart explains why. Specifically in Men’s. Women’s brands should also find reason to worry as the majority of items purchased in women’s sportswear isn’t brand specific.
While in the article above I discussed adidas and Under Armour as hving something to worry about, I overlooked Nike. In L2’s latest report they have shown that, “While Amazon’s private brands have historically been most successful competing with low-priced basic merchandise, more recent contemporary offerings pose risk of greater competition for legacy name brands. Amazon’s activewear brand Peak Velocity sells a $79 hoodie that has a Best Seller rank of #38 in the Active Hoodies category, one of Nike’s strongest categories.”
Amazon initially refrained from telling customers that the brands were Amazon brands. They are now proudly displaying that you are purchasing “OUR BRAND”.
Here is what is most compelling. In the chart that leads this story Peak didn’t exist prior to October 31st of 2017. Peak in less than a month is now ranked 38th in hoodies. If I’m at the big three I’m sitting with my division heads and discussing the strategy of dealing with Amazon. In particular if I’m Under Armour, who spoke highly of their relationship with Amazon during their last conference call, I begin to reevaluate the amount of sales I’m delivering through the platform. I’m not overlooking Nike here; Nike stated during Investor’s Day they are going to keep their pilot program with Amazon which I interpreted as Nike gaining control of the items sold on Amazon via brand gating. As I stated before though Amazon is a big problem with a difficult navigation system.
Use the source link to visit L2 for more information.