What You Need to Know About Amazon News This Past Week

Amazon is in the news daily with new initiatives, store openings, business changes, and more. Disrupting retail is a major undertaking and keeps the public talking about your every move. Keep abreast of what the marketplace is up to in the Directional Cue learning center and sign up for updates.

Summing It All Up

This week, Amazon shook the business world with its announcement of an increased minimum wage. Also, a new Amazon partnership electrifies the home industry. Plus, Harley-Davidson zooms onto the Amazon platform. Lastly, Amazon’s private label business remains in Amazon News This Week.

Keep reading for more details.

This Week for Everyone

Amazon Debuts Mattress Private Label

Amazon has the mattress industry wide awake with its recent announcement of a new product, AmazonBasics Memory Foam Mattress. The mattress comes in twin, full, queen, king, and California king and starts at $130.

Amazon mattresses lack the “try before you buy” benefit of regular mattress purchases. However, the economical price and free two-day delivery may outweigh concerns and make Amazon top-of-mind for mattress shoppers in the future. The mattress industry has seen a lot of disruption in recent years. So, innovative industry leaders will have to continue to push the envelope to stay ahead.

AmazonBasics is a bedrock brand in Amazon’s private labeling business. More news regarding Amazon’s private label strategies can be read below.

This Week in Business

Amazon Raises Minimum Wage to $15

Amazon may have relented to pay-disparity criticism by announcing that it will increase its U.S. minimum wage to $15. Over 250k employees (including those already earning $15/hr) will benefit from the change.

The increase was lauded earlier this week but quickly drew some disapproval when news broke that Amazon will cut benefits (ie. stock and bonus plans) of some seasoned employees to help fund the raises.  

Regardless, news of the pay hike had a ripple effect in the industry and beyond. For example, Amazon’s retail competition, Target and Walmart, quickly announced wage increases of their own.

Harley-Davidson Turns to Amazon

Now, Harley-Davidson hopes to improve brand reach and rev up its declining sales by revamping its image and marketing approach. Previously, Harley-Davidson merchandise could only be purchased directly through its website or dealerships. However, part of its new strategy is to entice millennial customers by selling its apparel and riding gear online with Amazon.

Amazon Partners with Arcadia Power

Amazon has partnered with Arcadia Power, a clean energy company, to get smart home bundle kits inside of customers’ homes. The bundles come at two levels, basic and plus, and at a monthly cost of $20 and $36, respectively. The Basic Home Efficiency Bundle includes a smart thermostat, smart plugs, smart LED light bulbs and an Amazon device, the Echo Dot. The Plus Home Efficiency Bundle contains the previously mentioned smart devices, but replaces the Echo Dot with Echo Show and also includes Amazon’s Ring doorbell.

The Arcadia Power partnership is a win-win because the smart products will increase energy efficiency and lower customers’ electric bills. At the same time, the smart products automatically introduce their smart devices into new homes.

This Week for Sellers

Amazon Announces an Accelerator Program

Amazon has started an Amazon Accelerator Program. As a result of this program, Amazon is able to recruit companies to help expand its private label business. Brands in certain categories like apparel, household goods, pet products, etc. can apply to participate by signing up at “Our Brands.” In return, accepted companies will receive marketing services, onboarding support, etc. from Amazon. Products resulting from the program will be sold exclusively on Amazon and become part of Amazon’s private label family.

Amazon Increasing Private Label Promotion Strategy

Amazon continues to add new products and brands (see above) to its private label repertoire and may have a new strategy to promote the items. As a result, Amazon has been testing a way to put its private label products in front of more customers.

“When searching for various products in beauty, health and household and baby items, some shoppers have seen the link ‘Similar item from Our Brands’ show up at the bottom of the listing. Clicking on the link, which is not an advertisement, takes you to the product page for Amazon’s own private-label offering.” ~ Eugene Kim, CNBC

This move could have an adverse effect on Amazon Merchants who compete with each other and Amazon to get their products in front of customers. And, there have already been complaints from Sellers and European regulators about Amazon’s unfair advantage. The criticism highlights that Amazon is both the retailer and the marketplace and can thereby use market sales data to create a competitive advantage in its retail business. So, this advantage impacts Sellers – big and small – who use the Amazon platform.

The intrusive Private Label product suggestions further drive home the point that Sellers must continue to offer key differentiators in their products and communicate them clearly in each product listing. Once the Amazon shopper understands your unique selling point and adds your product to their cart, the suggested products by Amazon become irrelevant.

Thank you for reading the top Amazon News This Week. Visit Directional Cue every day and stay tuned for the latest Amazon marketplace recaps!