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Amazon has opened its first pop-up store in Madrid, Spain in one of the city’s principal shopping districts, according to Reuters.
The space is laid out in the style of a house with all displayed items on sale. Goods for sale range from electronics to video games and clothing.
The e-commerce giant plans to open similar stores in Italy, Germany and Britain, according to the company spokesperson. The move underscores the online powerhouse’s push to attract customers through physical retail.
Amazon.co.uk is preparing for its biggest ever Black Friday sale – with the retailer planning 10 days of deals plus the return of its pop-up experience to the UK.
This year, the Amazon.co.uk Black Friday Deals Store will open from midnight on Friday November 16 to 23:59 on Sunday November 25.
Amazon will offer new ‘Deals of the Day’ everyday throughout the period across the site, with products ranging from must-have electronics, toys and fashion to sports, beauty, home items and more – no doubt with numerous licensed names included.
There will also be thousands of ‘Lightning Deals’ – products available at a discount, in limited quantities, for a short period of time – with new deals becoming available as often as every five minutes.
On top of this, Amazon’s Home of Black Friday pop-up will return, showcasing the best of Black Friday on the retailer.
Located at 3-10 Shoreditch High Street, London, the four-day multi-room experience will be open from Thursday November 22 to Sunday November 25.
Workshops will range from cocktail masterclasses hosted at the Amazon Beers, Wines and Spirits pop up bar; jewellery and candle making sessions from Amazon Handmade Artisans; beauty treatments from Foreo; hair styling from Nicky Clarke; cooking demonstrations; Prime Video screenings and more.
Among the brands showcasing deals, experiences or offering prize giveaways at the pop-up will be LEGO, Xbox, Yankee Candle, Hotel Chocolat, PlayStation and Nescafe among others.
“We know many of our customers are starting to think about Christmas presents, parties and decorations at this time of year and we’re excited to offer great deals when shoppers need them most,” said Doug Gurr, country manager at Amazon.co.uk. “We focus on making shopping as easy and enjoyable for the customer as possible so we hope customers will enjoy a new AR View feature in the app, which uses augmented reality technology to allow shoppers to see selected products in their own home before they decide to buy.”
The majority of Amazon’s private label brands are found in the apparel departments. Of those brands, 60 per cent target women. In terms of revenue and sales, approximately 20 per cent of its brands account for nearly 80 per cent of its private label brand sales, as per a report. AmazonBasics does nearly 3x the sales of its next most popular brand, Presto.
Currently, Amazon trails only Wal-mart as the top apparel retailer in the US, according to the Amazon Private Label Brands Analysis by JungleScout. It says that 42 per cent of customers who view Amazon Essentials products end up purchasing them.
The report says that most consumers search for the brand when buying an Amazon private label product, indicating strong brand recognition. Only 1 per cent of Amazon’s total sales account for its private label brands. Amazon’s Brand Scout + Ro saw 6.4x YOY growth in 2017 and Amazon has added more than 22 private label brands since 2016.
Amazon has invested heavily in women’s clothing labels and continues to do so. However, the analysis shows that women’s clothing performs poorly for them. Women’s clothing brands account for more than 51 per cent of Amazon’s private label brands overall (and 59 per cent of clothing brands).
“Of the 10 worst performing Amazon private label brands, 9 were women’s or girls’ clothing labels. And 82 per cent of women’s clothing brands fail to sell more than 100 units per month,” notes the report.
On average, men’s clothing performs three times better than women’s clothing per month. Clothing have difficult selling on Amazon as women want to try on their clothing before they buy it. The other successful brands on Amazon circumvent this issue by being lower cost, less public facing (for example, the women’s fashion labels that do well are casual/at-home wear, pajamas, and lingerie), or improved social proof, the report further adds. (KD)
As retailers step up the number of private labels they deploy, and apply ever-more-sophisticated positioning and merchandising strategies to them, brand owners and licensees are increasingly challenged to adapt to the changed environment.
Research from NPD Group shows that private label now accounts for a significant portion of sales in some of the biggest categories in the U.S., including technology, accessories and housewares. But the industry being most impacted at the
moment is apparel, where private label now accounts for 30 percent of total sales in the U.S. In Europe, private label is even bigger, with about one in three purchases made on private label brands. For some European countries like Switzerland, nearly half of purchases made are on private label, according to NPD.
In grocery, according to a Nielsen study for the Private Label Manufacturers Association (PLMA), sales of store brands rose 9.3 percent to $122.3 billion in 2017. (Those figures don’t include major private label purveyors such as Aldi, Trader Joe’s and Costco, nor does it include online-only retailers such as Amazon. Nielsen estimates that including such companies would add at least another $35B to the total.)
And while retailers’ proclivity for private brands has tended be cyclical in the past – they’re attracted by the margins, until something doesn’t work and they’re stuck with the markdowns, at which point they head back toward national brands — there’s general agreement that we’re in the midst of a fundamental change.
The Second Wave of Private Label
“Private label has always been around, but the quality and breadth of items available today are a far cry from the Brand X macaroni and cheese in plain white boxes in the value sections of 1970s supermarkets,” says Marshal Cohen, chief industry advisor, NPD, in the report “Private Label Revolution.” “Today, we’ve entered the second wave of private label, where big name retailers are investing more and more in bringing to market their own labels, which customers are growing to love.”
As with many of the other major shifts happening at retail right now, one can look directly to the consumer (and their enthusiastic e-commerce and social media uptake) to find the cause.
Consumers are now accustomed to the benefits of shopping and sharing online – instant price comparison, access to extensive product reviews and the idea that purchases reinforce their own identity (not the identity of a brand or retailer), says NPD. As a result, brand loyalty is trending down, and brands (all of them, not just private label) have to give consumers a reason to choose them, beyond just value or familiarity.
Want to find out about how retailers are using private label n their apparel strategies, and the implications for licensing? Then don’t miss the next LIMA/NPD Executive Breakfast, Nov. 14 in New York City. Two of NPD’s apparel and fashion experts will discuss not only the private label revolution and its impact, but also increasing consumer demand for sustainability in fashion, which is driving purchasing decisions, particularly among Millennials. Register now.
“Retailers went from seeing private labels as opening price point margin builders to viewing them as proper brands that could compete against national brands with a full spectrum of good, better, best products,” says retail consultant Carol Spieckerman. “They now consider these brands owned assets to the point of not only looking at the equity the brands have, but making them available to other retailers.” Indeed, Walgreen’s earlier this month unveiled plans to test sales of Krogers’ Simple Truth organic private label products through select stores.
An example of the tiered strategy retailers are taking with private labels can be found at Target, which earlier this month launched the Smartly brand — more than 70 basic products ranging from all-purpose cleaners to body lotion, paper plates and shower gel all priced between 59 cents and $11.99. Those items are priced about 70 percent below national brands such Procter & Gamble and 50% less than Target’s own Up and Up brand. Meanwhile, Walmart has expanded use of its Mainstays brand for bedding, in some cases in the price range of the Better Homes and Gardens label it licenses via a DTR with Meredith Corp.
To some market watchers, the genesis of this latest surge toward private label business is a case of retailers reacting to the realities of an omnichannel world in which brand owners and their licensees have developed their own direct-to-consumer business. Of course, the brands say they’ve been forced to do that as stores close, existing chains shrink and shelf space contracts. Also, the channel definition that once separated, for example, department stores and mass merchants, has blurred, driving retailers to carve out their own niches in extending private goods from entry-level to mid-priced, and in some cases, premium products.
Co-Branding With Licenses
In some cases, the private labels are co-branding with licenses. For example, Bloomingdale’s has introduced a Happily Grey x Aqua collection featuring 12 styles of women’s apparel priced $68-$249. The capsule collection combines fashion blogger Mary Lawless Lee’s Happily Grey brand with Bloomingdale’s Aqua private label, marking the first time the retailer has partnered with a social media influencer. Bloomingdale’s move comes a year after Nordstrom launched a similar collection with fashion blogger Arielle Charnas’ Something Navy brand, combining it with its Treasure & Bond private label. The collection registered $1 million in sales within the first 24 hours of being available last fall.
It’s not just for apparel. Seltzer Licensing’s Stuart Seltzer, who works with Safeway Albertsons, said he’s helped the company license in brands for co-branding with more than 100 products of that retailer’s private label products.
To navigate the new retail landscape, licensees must be complementary rather than competitive with private label brands, since retailers have built their own product development, brand-building and sourcing operations, say industry officials. To complement private labels, licensed brands must find a niche within a category that isn’t being addressed by retailer’s own label.
Co-Existing Rather Than Competing
“Instead of thinking about it as competing, licensees/licensors need to think about it as co-existing. Because if you look at it that way, then you also are speaking the retailers’ language,” says Spieckerman. “You are positioning your portfolio (of brands) in relation to a retailer’s platform and brands. It is about complementary strategies across multiple categories, rather than trying to knock the other guy out. There is always going to be a role for something that complements private brands.”
Yet finding those complementary strategies has become increasing complex, especially with broad array of brands readily available not only in stores, but online as well. Amazon has increasingly introduced private label brands – P.O.V. (personal care), Lark and Ro (dresses), Peak Velocity (sweat pants, shorts hoodies), Good Threads (men’s shirts, pants), The Fix (women’s bags, clutch, shoes) – but with little promotion and relying instead on consumer data to match products with buying habits. Walmart has been responding by buying online brands – Bonobos (men’s apparel), ModCloth (women’s apparel) and Moose Jaw (outdoor gear) — to create what essentially have become online private brands that can complete with Amazon’s labels.
“Amazon and other ecommerce retailers have been aggressive in building their own brands,” says The Joester Loria Group’s Debra Joester. “This is something that is not going to go away. Smart (bricks and mortar) retailers will figure out what their selling proposition is, what their consumer will accept and how they maintain a balance between branded products and private label items that are legitimate competitive options.”
If licensees and licensors need a measure of the private label business, the grocery business is a good marker. Grocery chains have long used private label for opening price point (OPP) items, but have gradually spread their use to more premium products such as organic food. Premium products accounted for eight percent of private brand grocery sales of $59.1 billion in the year ended July 8, 2018, while OPP accounted for 32 percent, according to Nielsen.
At the beginning of this year, Albertson’s announced that its O Organics line, launched in 2005, now generates $1 Billion in sales annually. The line features more than 1,000 products. In the most recent year, O Organics added about 200 new products and grew sales more than 15%. When it made the announcement, Albertson’s said that it planned to introduce 500 or more new products this year under the O Organics line, from produce, dairy and meats, to deli, snacks and baby items.
The Licensing Industry Merchandisers’ Association (LIMA) hosted Bricks & Clicks on Monday, Oct. 8, a tour that gave select Brand Licensing Europe attendees a chance to look at the modern retail landscape up close.
The Licensing Industry Merchandisers’ Association (LIMA) hosted Bricks & Clicks on Monday, Oct. 8, a tour that gave select Brand Licensing Europe attendees a chance to look at the modern retail landscape up close.
The first stop was at The Entertainer, located in the Westfield London shopping center in London. A beacon in an industry that has been shaken up by the closure of Toys “R” Us and other retailers this year, The Entertainer has continued to provide entertainment and play items for shoppers across the U.K. The company has plans to expand from 149 stores in the U.K. to 165 by the end of the year, and its growth is due in large part to the licensed toys that line its shelves. “The most success in physical retail is in experiential,” says Steven Ekstract, brand director, global licensing group, UBM.
The Entertainer offers wall-to-wall stock with prominent-branded displays and unique play areas. Featured sections include the Magic Mirror, a life-sized interactive animated AR experience, among others. In addition to a tour of the location, Mark Whittle, head, buying, The Entertainer, offered insight into the store’s success. He also added that while expansion in competitive markets is important, underserved countries, such as Azerbaijan, Malta, Kazakhstan, Kosovo, Cypress, Pakistan, Egypt, Macedonia and Albania have presented unique opportunities.ADVERTISEMENT. CLICK FOR SOUND.
It also opened 59 “Totally Toys”-branded store-in-stores at the British home goods and fashion retailer Matalan. The Entertainer also gives supplier exclusives and a Addo Division that provides private label items and DTRs, which included Pinkfong’s Baby Shark plush toy based on the viral song.
The shop was located in an equally impressive shopping center that offered specially curated experiences and bold branding strategies amid modern design concepts. Following The Entertainer, the group moved on to the “Clicks” portion of the event, which involved a tour of the headquarters of Amazon U.K.
Amazon and Flipkart are roping in celebrities to push their brands, reported Economic Times.
Amazon has already brought A-lister celebrities like Amitabh Bachchan, Alia Bhatt, and Salman Khan to promote Amazon Prime Video and its upcoming Prime Day.
Rival Flipkart named Ranbir Kapoor and Shraddha Kapoor as its brand ambassadors last month and has rolled out a film featuring these actors offering fashion advice.
According to the report, e-commerce companies have been using celebrities to promote sales events and also for more customer acquisition.
For example, Bollywood stars Hrithik Roshan and Deepika Padukone co-own brands with Myntra.
Both sell their respective celebrity brands of All About You and HRX and Myntra has been using the duo extensively to pitch products through television ads and social media and calling consumers with recorded ads.
On 22nd May, Licensing Expo opened its doors with a keynote panel, entitled “Great Expectations: Pace, Selection, Convenience and the Customer,” which explored the landscape of commerce and how customer expectations are rapidly changing.
In addition, Amazon unveiled a new platform that will allow licensors to develop and launch products faster than ever before.
“I’m excited to announce that Amazon is accepting applications for Merch Collab,” says Nicholas Denissen, vice president, Amazon. “Merch Collab is a new licensing program where brands can work with vetted designers and manufactures to help create the largest selection of unique branded merchandise.”
So how does Merch Collab work?
Within the portal, licensors big and small can establish brand do’s and don’ts as well as creative guidelines for their brands. Once a licensor’s guidelines are posted, the brand owner will start to receive product submissions from qualified designers. Once a submission is received, brand owners can ask for revisions, reject submissions or approve submissions in under 30 seconds, according to Denissen.
Furthermore, licensors will have complete control over what product goes live and may choose to take a live product down at any time. Once approved, the design will populate the brand’s Amazon store, where brand owners can also analyze data and see what sells.
“Merch Collab was designed to make licensing as easy as one click, buy it now,” says Denissen, who also noted that the program will help entrepreneurs, designers and small businesses reach Amazon’s 300 million customers while also driving awareness and increasing speed to market.
The program will initially be open to a limited number of brands, but Amazon will be accepting more invitations throughout the year as the company “works to get it right.” Those interested in applying for Merch Collab can visit MerchCollab.Amazon.com.
So, what does Merch Collab really mean for the licensing industry?
“Based on what we’ve learned [at Amazon], we believe that the licensing industry can grow to $1 trillion in the next years,” says Nicholas Denissen, vice president, Amazon. “That’s four times the current growth rate, 15 percent year-over-year. We’re on the cusp of a huge revolution in customer behavior, and we believe this is achievable and we want to be part of making this happen.”
What will it take to reach $1 trillion in 10 years? According to Denissen, more brands, more licensees, more manufactures, more designers, more selection and a much faster turnaround time, which the company aims to achieve with its new Merch Collab program.
NEW DELHI: Even after acquiring India’s largest e-commerce company Flipkart, Walmart will stay away from applying to invest in a food-only retailing venture in the immediate future that will allow the US giant to stock and sell groceries directly to consumers through the online platform.
Walmart would rather have a presence in the food products market through third-party retailers on Flipkart and escape the scrutiny and riders associated with foreign direct investment of up to 100% in food-only retailing ventures, according to sources.
“It doesn’t make sense to sell only food either through brick-and-mortar or through online,” said a person familiar with Walmart’s plans. “With all those riders, it is even harder to do it.” Walmart’s strategy is in contrast to arch-rival Amazon, which received government approval last year for a fully owned food retailing subsidiary that the Seattle-based ecommerce behemoth is yet to start. Amazon’s plans hit a hurdle after the government asked it to keep separate equipment, machinery and warehouses for the food products business and not to mix or share anything with its flagship marketplace business Amazon.in.
Walmart has always maintained that a food-only brick-and-mortar venture doesn’t make business sense because of the wafer-thin margins.
“Walmart would rather handle the back-end of the food and grocery and that will help it escape the scrutiny and riders associated with food FDI retailing,” the source said.
A spokesperson for Walmart declined to comment.
A company like Walmart is not in a rush because it is in India for the long term, according to Devangshu Dutta, chief executive officer of retail consultant Third Eyesight.
“They are looking at India as a longterm game — if it may not happen now, it will happen two years down the line when the regulations become friendly,” he said. “If you are in for the long haul, you are not in a rush as the window of opportunity is not closing.”
India created the food-retailing segment in 2016, allowing full ownership by overseas companies in ventures that could sell locally produced and packaged food items through offline and online channels. However, it set riders for applicants such as keeping logistics, manpower, accounting and offices, among others, at arm’s length from their existing ecommerce marketplaces. India also permits 100% foreign capital in online marketplaces, which can only be offered as platforms for other vendors and retailers to do business.
The government had banked on global retail giants such as Walmart and Tesco to lap up the new investment opportunity in food retailing, especially after the 2012 policy allowing 51% FDI in multibrand retailing remained a virtual nonstarter due to stiff riders.
While most global bigwigs shied away from investing in the high-profile food only retail ventures, Amazon appeared as a saviour in February last year, when it applied to invest $500 million through this route.
Amazon has now sought a clarification from the Department of Industrial Policy and Promotion on whether it can share some of its warehouse staff, entry and exit doors at warehouses, barcode machines, trollies, pallets and other logistical paraphernalia for its food-only venture with the existing infrastructure of Amazon.in, ET reported in April.
It has also asked the department if it can maintain the segregation “virtually.”
A top foreign retail consultant said Walmart would rather wait until India allows such ventures to sell non-food items like soaps, toothpastes and personal care items to make the business viable for store operators.