According to a report in tech publication Recode, Amazon.com Inc. (AMZN) is developing its own line of “activewear” apparel. This means that you will soon be able to buy sports apparel from Yoga pants to running pants made by the e-commerce behemoth. This move also puts the Seattle company into direct competition with the likes of Nike and Under Armor Inc. (UA).
This is not the first time that Amazon has ventured into private label territory. As the report points out, Amazon has released, at least, eight clothing brands aimed at different demographics in the last year. These include a women’s label called Society New York and one aimed at kids called Scout & Ro. Amazon also premiered a show called The Fashion Fund on its Amazon Prime channel. The show, which features industry powerhouses such as Anna Wintour and Diane Von Furstenberg, is now in its third season. (See also: Will Amazon Get Into The Online Ads Business Next?)
In addition to this, Amazon also launched its own brand of grocery products earlier this year. The company already sells a bunch of household essentials, such as bedsheets and knifes, under the Amazon Basics label.
If past moves by retailers into private labels are any indication, then it is likely that Amazon’s move into private labels will marked by cheaper prices and greater variety. The company’s competitor Macy’s.com Inc. (M) offers a slew of private brands in its department stores. They were responsible for 20% of its overall revenues in 2014. (See also: Big Money In Private Labels).
A 2014 post by Jeff Fromm from Millennial Cast laid out the case for private labels for millennials. According to Fromm, millennials are cost-conscious and are driving the growth of private label brands in retail. A survey by Market Track earlier this year showed that 88% of consumers prefer private brands to well-known brand names, if the price for private brands is cheaper.