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Amazon adds to grocery portfolio with ‘no frills’ brand

Amazon has made available a new private-label brand that offer discounts on grocery staples such as beverages, snacks, and pastas, as part of the multinational’s plans to strengthen its online food presence.

The Amazon Saver brand, which is positioned under company’s Amazon Fresh grocery banner, offers items priced at less than $5 (€4.61) such as cookies and crackers and perishable items like sliced turkey and ham with additional items revealed in the coming months.

In addition, Prime members receive an extra 10% off Amazon Saver products that form part of its ‘Our Brands’ discount made available through the customer benefits program.

“We're always looking to make grocery shopping easier, faster, and more affordable for our customers,” said Claire Peters, global vice president of Amazon Fresh.

“With expanded Prime member savings, the introduction of the new Amazon Saver brand, and simplified online shopping, it’s now easier than ever to get your weekly grocery shopping done on a budget with Amazon Fresh – whether you're browsing the aisles or filling your online cart.”

Amazon Saver brand is the latest own brand joining Amazon Kitchen and 365 by Whole Foods

As an introductory offer, Amazon has expanded savings to over 3,000 grocery items for Prime members that consist of up to 50% off 8 to 15 fresh produce, protein, and pantry staple products on a weekly rotation.

In addition, savings of 25% are available on over 1,200 rotating Prime-exclusive groceries and household essentials from top brands.

The Amazon Saver brand is the latest pricing model for the company, which launched the first iteration of Amazon Fresh back in 2007.

Since then, the e-commerce giant has acquired Whole Foods for $13.7bn (€12.6bn) in 2017, strengthening its Amazon Fresh brand and extending its roster of own brands, which include Aplenty, Amazon Kitchen, Happy Belly and 365 by Whole Foods Market.

Alongside this, Amazon’s ongoing experimentation with its online and brick-and-mortar grocery retail strategy, has seen the company assemble a portfolio of private label brands across food and non-food products, such as Solimo, Wag, Wickedly Prime, Presto!, Revly and AmazonBasics.

Unlocking private label value involves consistent positioning and scalable processes

“For many grocery retailers today, the lack of a comprehensive Private Brand strategy means that they'll get left behind,” said John Clear, senior director in Alvarez & Marsal's Consumer and Retail Group, based in New York.

“To unlock the value of private label, grocers need to have a clear plan in place: a differentiated brand architecture and consistent positioning across categories; scalable processes and innovation capabilities that will ensure their success is repeatable.”

According to the US-based consulting firm, private label’s market share is around 20% of the total grocery market, with predictions that this will increase to 24% by 2030.

Marco Valentini, managing director at Alvarez & Marsal's Consumer and Retail Group added that there was a strong correlation between the most successful private brand grocers and their market share and financial performance.

“The best players act differently from the rest of the pack,” he said. “Their C-level executives are committed to growing their own brands and driving differentiation through them. Marketing and branding efforts are aimed at elevating, differentiating products, and increasing overall customer awareness and advocacy of their brands.”

“Product innovation cycles need to reflect the yearly cadence of line reviews and retailers must be able to constantly innovate and update their ‘Own Brand' products.”

Consumers are laser-focused on value when they are grocery shopping

Commenting on the launch of Amazon Saver, Neil Saunders, managing director and retail analyst at GlobalData Retail said: “It makes sense because, after years of high inflation, consumers are laser like focused on value when they are grocery shopping.

“That’s one of the reasons there has been a migration to store own brands across many categories.

“Amazon still has big ambitions in grocery, so it needs to jump on this bandwagon as well as sharpen its value for money position.”

Saunders added that success depends on price points being genuinely competitive, but also on Amazon communicating these well in stores and online.

He pointed out that it was also important that the new brand established a reputation for reasonable quality.

“Consumers do not want cheap products; they want good products with low prices,” he said.

“More broadly, Amazon still has a lot of work to do in order to truly breakthrough in grocery. It has had some success online, but it still hasn’t come up with a store format and proposition that enables it to take on established grocery rivals in a serious way.”