Amazon Private Label Brands Competing with Its Advertisers
Last month investment firm Piper Jaffray projected Amazon will more than triple its advertising business to some $16 billion by 2021, largely based on the retail giant’s position as “the world’s largest product search engine”.
While Google may take exception to that particular designation, it is undeniable that Amazon has rapidly become a major advertising platform for everyone from Fortune 500 companies to mom-and-pop shops, who together spent a reported $2.2 billion in the second quarter alone trying to get in front of Amazon’s millions of shoppers, who are actively searching its site for products to purchase.
What may be less obvious is the fact that these advertisers are often competing with Amazon itself to reach its shoppers. That is, they’re competing with Amazon for placement in its site’s highly competitive search results.
To better understand this trend, Kantar Media recently performed an analysis of brand visibility in Amazon search results for several product categories within the health vertical.
Amazon Brands in Top 10 for Health Product Searches
Over the past few years Amazon has been assembling a formidable stable of private label brands categories ranging from apparel and electronics to home items and personal care.
Today Amazon’s private labels are among the top brands in Amazon search results in a variety of product categories, according to Kantar Media data.
Health is a prime example.
In August 2017 Amazon launched its Basic Care health brand, which features dozens of different over-the-counter (OTC) drug products containing the same active ingredients found in major OTC brands (ibuprofen, acetaminophen, cetirizine, minoxidil, etc.) but at lower prices, of course.
From August 1-15, 2018—on the cusp of the key ragweed season—Kantar Media found Amazon’s Basic Care was the top brand displaying in Amazon.com search results for 4 popular allergy-related keywords—including ‘allergy pills’, ‘allergy medicine’, ‘allergy’ and ‘allergy relief’—based on factors including the percentage of time the brand was found in the top 3 positions on the first search results page, the brand’s average page position and the number of the brand’s listings found.
Zyrtec ranked second in Amazon.com search results on the 4 allergy keywords, followed by Claritin, GoodSense and Flonase rounding out the top five brands.
During the same two-week period, Amazon private label brands were among the most visible in another health-related category, vitamins. Amazon Elements, Solimo and Amazon-owned Whole Foods brand 365 Everyday Value ranked 8th, 9th and 10th, respectively, on the top 17 vitamin keywords (‘vitamin d’, ‘vitamin c’, ‘prenatal vitamins’, etc.). Nature Made and Bronson were the top two advertisers on the vitamin keywords. Although none of the Amazon brands cracked the Top 5 on their own, collectively all three brands would have ranked 2nd in the search results for vitamins had their numbers been pooled together.
Looking at brand visibility on the vitamins keyword group from another perspective, the average listing position for Amazon Elements, Solimo and 365 Everyday Value was position 4, 5 and 9, respectively, while the average listing position for the top 3 brands, Nature Made, Bronson and Nature’s Bounty, was position 14, 12 and 15, respectively. That means Amazon brands on average displayed far higher on the page than even the most visible brands on the vitamins keyword group, though likely less often.
In the cold and cough medicine category, Amazon private label brands were less prominent, though still present among top 10 brands on the keywords ‘cold medicine’, ‘cough suppressant’ and ‘cough syrup’. Out of 35 brands advertising on the keyword group, Solimo ranked 8th while 365 Everyday Value ranked 9th, essentially beating out two dozen other brands.
Together these findings suggest tougher competition for brands in the allergy, vitamins and cold & cough categories to appear in the top positions on the first Amazon search results page; there are simply fewer such positions available as Amazon is often taking those spots for itself to promote its own products.
Will Amazon Replace the Drug Store?
In addition to OTC medicines, Kantar Media data shows Amazon private label brands at the top of Amazon.com search results for several personal care/household items also commonly purchased in drug stores and grocery stores (where both OTC and prescription drugs are commonly sold).
• Amazon Elements ranked 1st on the keyword ‘baby wipes’, beating out Huggies and Pampers, which ranked 2nd and 3rd, respectively.
• Solimo ranked 2nd on the keyword ‘hand soap’ behind Softsoap, while Amazon’s Presto! brand ranked 7th.
• Solimo ranked 2nd on the keyword ‘lotion’ behind Olay.
• Amazon’s Mama Bear ranked 4th on the keyword ‘laundry detergent’ while Presto! ranked 10th.
• Solimo ranked 6th on the keyword ‘sunscreen’.
Given Amazon brands’ presence in OTC and personal care product searches, and the fact that it purchased online pharmacy PillPack earlier this year, it’s not unreasonable to speculate that the retail giant may be seeking to gain a foothold in another traditional retail category (as it’s doing with grocery) and ultimately replace the drug store altogether for its shoppers.