The Wall Street Journal reports that Amazon "has quietly begun its first broad push into perishable private-label foods," offering for sale this week on its site "whole-bean and ground coffee under its new Happy Belly label, pitting itself against crosstown rival Starbucks Corp. Amazon also has rolled out bottled Mama Bear baby food in two flavors."
The story notes that "similar to its rollout of private-label clothing lines over the past year, Amazon released its new products with virtually no fanfare," but that if successful, the products should be able to bring the retailer higher profit margins. "Amazon has taken pains to disguise the provenance of its new private labels," the story says, adding that "neither of its product description pages identify Amazon, and a customer service phone number is for AFS Brands Inc. in Seattle. A representative there said the acronym stands for Amazon Fulfillment Services."
The Journal also reports that "Amazon seems to be hoping to establish its brands as something other than just discount alternatives to mass-market competitors. Bags of 12-ounce Happy Belly coffee cost $9.99 each, about $2 more than Starbucks’s breakfast blend, but about $3 less than Starbucks’s French roast in a similar size. And it is less expensive than some small-batch roasters."
The story notes that "similar to its rollout of private-label clothing lines over the past year, Amazon released its new products with virtually no fanfare," but that if successful, the products should be able to bring the retailer higher profit margins. "Amazon has taken pains to disguise the provenance of its new private labels," the story says, adding that "neither of its product description pages identify Amazon, and a customer service phone number is for AFS Brands Inc. in Seattle. A representative there said the acronym stands for Amazon Fulfillment Services."
The Journal also reports that "Amazon seems to be hoping to establish its brands as something other than just discount alternatives to mass-market competitors. Bags of 12-ounce Happy Belly coffee cost $9.99 each, about $2 more than Starbucks’s breakfast blend, but about $3 less than Starbucks’s French roast in a similar size. And it is less expensive than some small-batch roasters."
- KC's View:
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Amazon has done this before - like with diapers - and it hasn't always worked out. As much as a fan as I am of Amazon, it is hard for me to figure out why I'd try their coffee rather than stick with my usual Starbucks blend, or my favorite Stumptown blend. I would think that a key factor will be generating trial, and then making sure that people actually see its products as having a differential advantage that will cause them to change established behavior.
Then again, getting people to change established behavior is sort of what Amazon does best. I may be a little skeptical on this effort, but that certainly doesn't mean I'm right.
