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The House Always Wins

This very afternoon, my wife received a package from Amazon. As she was unpacking her delivery, she
Things Marketers Should Know
The House Always Wins
By Rob Bettis • Issue #10 • View online
This very afternoon, my wife received a package from Amazon. As she was unpacking her delivery, she informed me, “These workout clothes are supposedly made in the same factory in China as Lululemon, but Amazon sells them for half the price.”
The brand was Core 10, just one of Amazon’s ~100 (and growing) private label brands.
After mastering how to sell everyone else’s stuff, Amazon has sharpened its focus. Now it’s trying to persuade shoppers to buy its own products.
It’s succeeding. Amazon’s private label sales will reach $7.5 billion this year, analysts at SunTrust Robinson estimate. By 2022, they are expected to hit $25 billion.
Retailers have offered private label brands for decades. So that part is not new. However, the biggest hinge pin in this discussion is market share.
According to a study by Jumpshot, brands with the largest market shares on Amazon are barely edging out their competitors. That means non-Amazon marketshare is not translating onto the Amazon marketplace.
The differentiation (or lack thereof) between brands’ market share on Amazon and off suggests Amazon shoppers have no brand loyalty. In other words, the Amazon platform is commoditizing the products for sale on its site. As we know, commodities compete solely based on price. With its favoritism shown to low prices, its unlimited shelf space, and its limited space to convey value props, Amazon is creating a huge problem for brands, who are increasingly relying on Amazon as a sales channel.
And that is before those brands start competing against Amazon’s own products, expertly designed with competitor data and crafted specifically to compete and win in the Amazon Marketplace.
You can call them white label products, but I call them “house” products because the house always wins.

Amazon is building an army of brands - CNN
Amazon is not only setting the trap for retail brands to walk into, but it also charges them for the experience.
Google search losing some advertising business to Amazon, agencies say
Despite recent pressure from Amazon, Google Ads has kept its stronghold on online advertising.
Kirk Williams
“For every dollar spent in digital marketing, $0.39 is spent on Google, $0.37 is spent on Facebook, and the rest is split among everyone else.” -@MarkIrvine89 of @WordStream #stateofsearch #ppcchat
11:57 AM - 11 Oct 2018
The inner city gang culture is often portrayed in movies as a choice between two evils. You can avoid membership, perhaps to your own peril, or you can join to pursue a path that will almost surely end in peril. For many, that sliver of hope - that one may look evil in the face and overcome it - greatly influences the decision. But regardless of the choice danger still looms.
That outlook - that feeling - is what I sense when I counsel online retailers who are considering their relationship with Amazon. Danger looms.
Facebook Wants More Access
Facebook has released a new product specifically for folks who haven’t read news about Facebook in the past 3 years - Portal. Portal is a video/voice assistant comparable to Amazon’s Echo Show.
Portal from Facebook: Voice Enabled Hands-Free Video Calling
jon.portergeist👻
This paragraph right here pretty much sums up my attitude towards the camera-equipped Facebook Portal https://t.co/SjsGboyPEz https://t.co/XiksmojJG0
9:57 AM - 8 Oct 2018
Although the Portal touts the ability to securely turn off the camera and microphone, consumers who have already been burned by Facebook have their doubts.
DHH
Always-on microphone and video camera for in your living room by the most notorious, planet-scale violator of privacy. This company took 2FA phone numbers to use for ad targeting. You don’t think they’ll exploit what they record on these? “Dumb fucks” *Zuckerberg chuckle*. https://t.co/rkS77Rl8E9
10:34 AM - 8 Oct 2018
DHH is, of course, referring to comments Zuckerberg reportedly made in 2004 about the willingness of users to share personal data on the Facebook network.
The Privacy Reformation's Impact On Search
Google.com’s privacy-minded counterpart, DuckDuckGo, experiences exponential growth as searchers become more aware of data privacy concerns.
DuckDuckGo
DuckDuckGo fun fact: it took us seven years to reach 10 million private searches in one day, then another two years to hit 20 million, and now less than a year later we're at 30 million! Thank you all 😃 #ComeToTheDuckSide https://t.co/qlSaz4j9ZH
9:47 AM - 11 Oct 2018
Better Late Than Never: Google+ Edition
Google+ shutting down after users' data is exposed - BBC News
scripting.com
Google+ was unmotivated by any need for what it did. No one loved it. It was born only to slow Facebook growth. It’s like having a kid so it can beat up your neighbor’s kid. Products, to be any good, must be motivated, have a creative purpose.
3:26 PM - 8 Oct 2018
⌨️ Talk To Me ⌨️
Is there a story I am missing in the market world? Let me know - me@robbettis.com.
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Rob Bettis

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