Amazon Using House Brand Pop Ups To Undercut Branded Products
Distributors and manufacturers who are being asked to sell their products on the Amazon marketplace are facing the real possibility that Amazon will use their listing to undercut them with a house brand product of their own following mobile tests currently being tested by the big US retailer.
Last week Amazon was caught testing a pop-up feature that pitched its private-label goods on rivals’ product pages, in this instance it was Energiser battery products that were being used to promote a cheaper Amazon house brand product right underneath the branded product.
The Amazon pop-up that took over much of a product page, forcing customers to either click through to the lower-cost Amazon products or dismiss them before continuing to shop.
The move appears to be a marketing ploy to use well-known brands to generate a search and then take over the SKU with an Amazon offer this is despite a brand having to pay for the content in the SKU.
For example, when a customer using Amazon’s mobile app searched for “AAA batteries,” the first link was a sponsored listing from Energizer, but when a visitor clicked on the listing, a pop-up window appeared, offering less expensive AmazonBasics AAA batteries.
Amazon’s private-label brands which are currently being expanded in Australia have gained market share in some categories, such as batteries, and the company actively advertises its products throughout the site.
Amazon said the pop-up windows were part of test “to help shoppers find cheaper alternatives”.
“We regularly experiment with new shopping experiences for customers, and this was a small test,” the company said. “The similar, lower-priced product options shown to customers featured relevant items from a range of brands on our website and were displayed when a customer clicked on any type of listing.”
The Wall Street Journal found three instances of the pop-up ads, which took up about half of a 6.5″ Apple iPhone screen all of the pop ups touted Amazon products on rival pages.
One company whose sponsored-listing page was targeted, Nested Naturals only found out about the test through social media, its co-founder and chief marketing officer, Kevin Pasco, said.
Mr. Pasco described the tactic as “sneaky,” though he said building a business on Amazon requires “having a stomach of steel and taking whatever, they throw at us.”
In the Energizer example, Amazon’s pop-up appeared in a sponsored listing for a 24-pack of MAX Premium AAA batteries priced at $12.14. The rival 36-count AmazonBasics batteries cost $8.99.
An Energizer spokeswoman declined to comment.