Amazon's Data Gives It Advantage In Private Label Launch

Reports from the Wall Street Journal indicate that Amazon.com, Inc. AMZN plans to launch private label food and additional household items over the next few weeks. Pacific Crest’s Edward Yruma maintained an Overweight rating for the company, with a price target of $800.

The expected launch of private label food and additional household items follows Amazon’s recent private label launch of apparel. These developments support the thesis that apparel and food are the two key strategic focus areas for the company, analyst Edward Yruma noted.

The brand names in the food and additional household categories include Happy Belly, Wickedly Prime, and Mama Bear, while items reportedly include nuts, spices, tea, coffee, baby food, vitamins, diapers, and laundry detergent, Yruma quoted the WSJ as saying.

What This Means For Amazon

The analyst termed private label as being “a critical component” of food, accounting for an estimated ~20 percent of food retailing. He added that the supply chain infrastructure for private label food was highly robust, and believes a launch could be scaled very quickly.

“We believe AMZN’s data can be a key competitive advantage. We note that AMZN seems to have leveraged customer reviews in its private label apparel launch and believe AMZN can similarly utilize reviews along with customer surveys to inform product development of private label food or household product offerings,” Yruma wrote.

The analyst added that the utilization of consumer data in product development was “a key differentiator” in the consumer industry.