Recent media reports in the US have suggested consumers are largely unimpressed by Amazon’s own-label products. But how do its private-label ranges measure up with UK consumers? We recently ran some research using our MMR Express service with over 800 Amazon grocery shoppers to find out.
Although Amazon is a relatively new entrant to UK grocery, shopper perceptions of its grocery credentials are generally positive. In our research, 80% of shoppers mentioned the company’s delivery capabilities and 77% agreed that Amazon is trustworthy.
However, shoppers did signal some confusion about how Amazon delivers groceries. Comments like ‘I worry about how clean the vans will be’ or ‘Would my groceries be delivered in a car?’ were typical.
Shoppers also expressed negative sentiment about freshness (mentioned by 46%) and the company’s ethics (33%), with comments such as ’I object to how Amazon treats its workers’.
As for specific Amazon brands, such as Solimo, Happy Belly, Presto and Wickedly Prime, consumer perceptions were largely poor.
To gauge first impressions, we showed shoppers a pack shot and product details for an Amazon own-label product, and for a branded competitor, and asked them how they felt about both products.
When we pitched Solimo mayonnaise against Hellmann’s, for example, we found shoppers struggled to see the benefits of the Amazon own-brand version.
Across the board, Hellmann’s scored significantly higher on brand trust, credibility and sophistication versus Solimo. The one exception was interest, with more shoppers describing Solimo mayo as ‘interesting’ than Hellmann’s, though that is likely the shock of the new.
It was a similar story when pitching Amazon’s Presto washing-up liquid against Fairy.
Wickedly Prime impresses
One Amazon own-label brand that did generate a competitive profile with UK shoppers was Wickedly Prime.
For our research we compared Wickedly Prime spaghetti against Barilla, and found the Amazon brand managed to stand its ground surprisingly well.
It matched Barilla on Italian heritage (named by 86% of shoppers for both brands), and even beat it on perceptions around taste (79% positive for Wickedly Prime vs 70% for Barilla) and health (78% vs 57%).
Pricing & positioning
Across the board, however, shoppers indicated they would opt for established brands over Amazon own label, even when price was taken into account.
Amazon own label may be cheaper than brands in many cases, but not cheap enough to lure shoppers away from more trusted brands.
Of course, Amazon is not necessarily trying to be the cheapest – nor are the prices currently displayed on its website likely to be permanent.
Plus, its own-label grocery products may not be targeted at mainstream shoppers.
As a recent Grocer article pointed out, some of Amazon’s own-label portfolio is clearly targeted at the horeca (hotel, restaurant, café) trade. This means additional benefits offered by Amazon, such as fast delivery and no minimum order size, need to be taken into account above and beyond the list price. For many small businesses, these could add meaningful value versus their usual wholesalers.
That said, many branded competitors available through Amazon offer the same, or similar, benefits.
And while trade buyers may be less sensitive to pack aesthetics than mainstream shoppers, packaging that fails to command trust and confidence is likely to affect business decisions as well as consumer ones.
All in all, Amazon’s landing is not as disruptive as one might have expected, with packs and prices failing to excite. That said, this is probably version 1.0, and the company will be learning from the initial launch. So brands have a little more time to drive up the distinctiveness and perceived value of their offer.
However, if Amazon is serious about becoming a credible player in UK own-label grocery, it will need to up its game.