After a change in strategy, the top position in the search results is reserved for products from Amazon’s own brands – provided the Group has suitable offers for the search.
The first position in Amazon search results is increasingly a private label of the Seattle-based 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 foregone 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. The market research institute Coresight Research estimates that private labels played an increasingly important role in Amazon’s overall strategy.
Amazon confirmed to Pro Publica that the company had made a strategy change: “Like all retailers, Amazon regularly makes decisions about how to use the space in our online shop based on a variety of factors that focus on what customers do find the most helpful, ”said an Amazon spokesman. In the course of this, a merchandising placement had been introduced.
Amazon is changing its strategy
According to observations by Pro Publica, this merchandising place is always the first search result and is used by Amazon’s own brands, if there are any that match a search result. Amazon justified the move with the great popularity of its own brands: “Amazon’s own-brand products have higher customer ratings, lower return rates and higher repeat purchase rates on average than other comparable brands in the Amazon shop,” the company says. That’s why Amazon, like other retailers, highlights its own brands in promotions and marketing.
Amazon has been planning to change the labeling of this merchandising function for many months. It is a coincidence that it coincides with the corona pandemic.
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 sales to Amazon in order to be as high as possible as a search result.
Amazon search results high up are preferred
According to analysts, many who search for products on Amazon’s website opt for products that are as high as possible in the search results. By using the first placement for Amazon’s own brands, Amazon therefore has an advantage over the competition.
Amazon’s actions are defended by Randall Fields, CEO of Park City Group, a retail consultancy. “They don’t do anything that other supermarket chains don’t,” says Fields. Private labels would also be prominently displayed on the shelves and sales areas in supermarkets. However, Fields admits that the extent on Amazon is “huge”.
Because in all of this, Amazon’s position in online trading plays a crucial role. Almost 40 percent of sales in the US online trade are currently generated by Amazon. And many sellers and suppliers use Amazon as their primary or sole sales platform. These suppliers then have problems when their offers have to compete against Amazon’s own brands that are so prominently placed.
Ingo Pakalski is the author of the article.