As well as launching competitive products, Amazon can use its platform to promote them aggressively. In 2017, Scott Galloway, Professor of Marketing at the New York University Stern School of Business, conducted an experiment to illustrate how Amazon was using its voice platform, Alexa, to promote its own brands. He reported how, in key categories such as batteries, Alexa would suggest Amazon Basics and play dumb about other choices, saying ‘Sorry, that’s all I found!’ when there were many other big brands — Duracell, Energizer, etc — listed on Amazon.com.
Galloway showed how this advantage was pressed home by Amazon Basics batteries being cheaper if ordered via voice, through Alexa. Thus, customers are further encouraged to shop this way and unknowingly steered away from more established brands.
It’s not just via Alexa. Amazon’s practice of exclusively promoting its own private-label products on the most prominent parts of its site has drawn the ire of many sellers and brands for being unfair and abusive. But Amazon continues to double down on growing and promoting its private-label offerings. This is standard practice for big retailers, online or otherwise, though never before at Amazon’s scale and pace. As of March 2019, Amazon had 119 private-label brands according to research firm Gartner’s L2, almost all of which were created in the past three years.
So how can companies and brands navigate the Amazon challenge and successfully sell online?