Online retailers create their own brands
NEW YORK >> In Andrea Bright’s home, Kleenex tissues, Charmin toilet paper and Glad trash bags have all been replaced by one brand: Prince & Spring.
Never heard of it? It’s the 3-year-old house brand from Boxed.com, one among many new lines from online retailers vying to be the next private-label juggernaut. Think Costco’s Kirkland Signature or Kroger’s Simple Truth, but for online shoppers only.
Online retailers are creating their own brands for the same reason brick-andmortar stores have long done so: They make a bigger profit, and the items help attract and keep customers. Jet.com launched Uniquely J last fall. Amazon now has Wickedly Prime, AmazonBasics and several other brands. And one new website, Brandless.com, has gone even further. Adamant that it’s not a private label, it nonetheless sells only its own goods such as toothpaste, tampons and trail mix.
For shoppers, who may see the new brands atop their search results, the online-only store labels can offer cost savings on basics, organic items they can’t find in nearby stores, or a change from products they see everywhere.
Bright, an academic counselor from Mattoon, Ill., started buying Prince & Spring products about two years ago. They cost less, she says, and she finds them to be “very good quality.”
Since online retailers don’t have store shelves, they find other ways to get their labels in front of customers. Sites design packaging that pop on screens. Some use organic ingredients or recycled materials
to stand apart, while others ship boxes of free samples to hook shoppers.
Jet analyzes customer data to decide what free samples to send and also what products to make. Sriracha is a hot seller, but it didn’t have an organic version,
so it created one for Uniquely J.
Jet says it started to work on Uniquely J before the site was bought by Walmart Inc. in 2016. But while you can find Walmart’s private-label brands on Jet, you won’t find Uniquely J in Walmart stores.
“We evaluate that all the time,” says Dan Hooker, who’s in charge of the online retailer’s private brands. “But right now, it’s an exclusive Jet.com offering.”
Store brands typically start out selling frequently bought products, such as toilet paper and napkins, and grow from there. Prince & Spring did that, and now plans to add laundry detergent, almond butter and bottled water.
To make store brands, retailers find manufacturers who can produce the items they want, says Woochoel Shin, a marketing professor at the University of Florida’s Warrington College of Business. But sometimes it’s the big brands that also make the private-label goods — something many don’t want to advertise.
“If consumers knew that, who would buy the national brand product?” says Shin, who has studied store brands.
No matter who’s making them, the new online entries increase the pressure on big brands, which have already been dealing with the growth of private-label brands in stores.
How much of an effect are the new online brands having? Amazon, Boxed, and Jet wouldn’t give sales figures. But brick-and-mortar retailers show that store labels can be very lucrative.
The owner of Albertsons, Safeway and other supermarkets says its O Organics label recently surpassed $1 billion in annual sales, its fourth brand to do so. Kroger’s Simple Truth has passed the $2 billion mark. And wholesale club Costco says Kirkland-branded nuts, milk and other goods made up about a quarter of its $129 billion in annual sales.