If something Amazon has taught us is that it is able to reinvent itself according to the times. Its white Solimo brand is proof of this, especially when imitating Nespresso coffee capsules. Curious, at least the similarities with the white Mercadona brand, Hacendado.
The company that started with Jeff Bezos selling books on a recycled door has now become the largest ecommerce in the world. So much so that its search engine ranks third among the most used on the entire planet, after Google and YouTube.
Read more: This is how Amazon is winning the war of coffee capsules compatible with Nespresso and Dolce Gusto
There is no doubt that Amazon has managed to adapt what the market is asking for and its users on more than one occasion. Especially those who have premium accounts, Amazon Prime users.
In terms of its approach to white marks, this strategy varies in some countries depending on consumer preferences and producers’ decisions.
And it is that choosing to sell its own products under white brands is not only typical of Europe, since in Latin American countries it is also beginning to implement it. For now, its biggest rival is Aliexpress, especially at the price.
While in America, Amazon has looked towards Walmart in order to profile its virtual store, in Spain it has looked towards Mercadona. The star chain of supermarkets in our country. The result has been set in Hacendado, a clear reference for the company’s strategy chaired by Juan Roig.
If Mercadona stands out for something, it is not only for offering a very fine shopping experience in its supermarkets, which contrasts with other surfaces in national territory; but for Hacendado. Its quality, reduced price and a multitude of products that it covers, such as Nespresso imitation coffee capsules, have made it a benchmark for its competition.
Amazon’s strategy is evident with Solimo; but it is not the only white label that the American giant has
It is this same idea that Amazon applies in its ecommerce. Users and buyers react better to a white label.
Opinea has concluded after its online survey that 85% of Spaniards like to buy white brands when making the purchase, especially Millennials. In addition, the regular consumers of these products are 92%.
For its part, ADECES (Association for Economic and Social Civil Rights) has examined 31 products in seven food chains at the time of online purchase and has concluded that this is up to 45% cheaper when brands are incorporated into the cart white
Data that corroborate the turn of Amazon in its ecommerce platform, which already has more than 100 white brands in its virtual store. Two of them are focused on the market of coffee capsules, both Nespresso and Dolce Gusto. Although the competition is fierce in this niche, the truth is that Amazon came last; but it has been known to put to the head. And it is not an isolated case.
Amazon white brands and the impact on their income
Amazon safeguards the amount left in their accounts sales of their white label products, and therefore, the relationship they have with respect to total revenues yet.
According to estimates made by SunTrust analysts Robinson Humphrey estimates that the white-label business reports to Amazon an amount exceeding $ 7.5 billion annually worldwide. Calculation expected to triple in 2022.
That is, of the 232,887 million dollars that Amazon invoiced in 2018, its white brands would add up to 3%, and being able to reach 10% in the coming years.
Although Amazon Spain has certain differences with respect to the version of other countries, the giant uses the same common strategy, which is based on the knowledge of its users.
The secret of the company that runs Jeff Bezos is based on that comprehensive experience designed by and for the consumer that ranges from the sales process to the affiliate program. A sales strategy brilliantly designed for private users, companies and professionals, when buying and even using their products.
In fact, its white label products, as with Hacendado, cover various categories, from how coffee capsules, to furniture or technological products, such as Amazonbasics, or even clothing.
This last market is one to which Amazon is giving greater importance, even among its affiliates. Of course, the strategy that Amazon is following has detractors and fans. Not surprisingly, 116 of the 160 white brands of Amazon are aimed at this sector. The first date of 2007, with Pinzon, aimed at selling bedding.
It is not surprising that one of the most important critics is Ralph Lauren. The American clothing company has chosen to follow its own path in view of a future problem of sales margins, which clashes frontally with its brand reputation.
The objective of the white label is none other than to get sales without directly linking them to Amazon, although sometimes the relationship is explicit. Although, in many cases the description itself shows the direct reference; but other times the relationship is not as clear as a comma unless we look closely at the brand name.
Of course, it is no coincidence that he has modified his algorithm so that the products that generate the most profit margin on the platform are those that are promoted automatically. This directly concerns their white brands and own products.
Curious at least that the American giant does not squeeze his head much when choosing names for his brands. Many of them are so simple that they seem like rain of ideas of very short duration.
Although it can also be a strategy for the consumer to discover if he investigates a little. As happened in 2017 with the purchase of Whole Foods Market healthy food supermarkets for $ 13 billion after it had experimented with the sale of own fruit and vegetables on its platform.
The objective was to use their customers, their employees and more than 400 establishments to, in addition to selling their white marks physically, use these logistic points as a basis for their distribution in less than two hours. The service we now know as Amazon Prime Now.
Amazon white brands strategy: Solimo and 115 other firms
Beyond looking at products with a lower cost, what many users are looking for, Amazon wants to take advantage of the pedigree that white brands have harvested in Spain and other countries. Made home with its brand image and reliability when offering quality products.
The company of Jeff Bezos is very aware of this, and just as he wants users to associate Amazon with quality products, he pursues the same with his own products.
Now, he poses it as a background race. Without short deadlines and without haste, Amazon lets its white brands flow to see how they work and are welcomed by the public.
It is not surprising this way of proceeding, because Amazon is present in dozens of countries, and often markets the product, but it does not just take root in the same way from one territory to another.
And it is that between countries the flavor or roast of coffee can vary, in the same way as a perfume or the taste of a juice packed in order to adapt to different countries.
Read more: 13 ways in which Amazon gets its customers to spend more without them noticing
In this way the firm of Jeff Bezos applies a plan that subdivides into several phases. First, It issues a white mark in a niche with profitability. If it is a product of first necessity or consumable, it sometimes refines it depending on the reaction of the consumer.
Upon acceptance, he removes it or disposes of a second white label, as he has done with the Solimo and Happy Belly coffee capsules. The second raid is usually a premium version of the previous one. As in these capsules, that at a slightly higher price, the taste of coffee is better.
After that, let time pass, sometimes up to a year, to see the development of the product. In this way, it withdraws, adjusts or increases its varieties.
Lawful tactics; but that has raised blisters among producers, as they accuse Amazon of increasing its market share with its products, in the style of Google.
Amazon, meanwhile, argues that in its defense that none of its white label products take a list of bestsellers in its range. It could be true if we didn’t count Solimo capsule coffee.
A success of the American firm given the reduced amount of its capsules and a quality / price that pleases consumers very much. Online strategy that is also leading to its own physical supermarkets. So at this point, that inspiration in Hacendado makes even more sense.
In this way, Amazon gradually enters its own lines in many markets to increase its profit margin, since it does not work only as a platform that hosts or distributes third-party content, but also aims to control the entire process and increase the company margins.
This white label strategy is the icing on the cake. Amazon aims to cover the full spectrum possible. It is here when you can make an analogy with other products, such as your Amazon Prime Video audiovisual productions, your own book publisher, the Amazon Pantry virtual supermarket or Prime music with its stations, for example.
All of them find their point of connection in Alexa that, although you have removed the quick purchase buttons, the physical, dash buttons, are still digital, providing the one to make fast and direct purchases from Alexa, in addition to managing searches around your ranking internal or subscribe to other services.
The roads suggest that Amazon wants to establish its own brand based on a multitude of products under different names to arrange them alone in an ecosystem that ends through its own virtual assistant: Alexa. A silent strategy, elaborated as meticulous as ambitious.