Indranil Bhoumik | Mint | Getty Images
A shopper browsing Amazon.
Amazon is getting into another category in retail: skin care.
Amazon has increasingly been adding its own in-house brands, including ones for clothing, shoes, snack foods, baby diapers and mattresses. The move threatens the other brands that currently sell on its platform, as Amazon has the power to give its own labels top placement on the website. Other rivals that sell the same items at higher prices also can be threatened as sales shift to Amazon’s cheaper alternative.
Amazon currently has 138 private labels, according to TJI, a subscription business that tracks Amazon’s further foray into retail.
“Our goal is to help customers spend less time and money searching for the right skincare solutions,” Kara Trousdale, head of beauty for private brands on Amazon, said in a statement.
As Amazon grows more in bricks-and-mortar retail, it could start to put its in-house brands on shelves in stores, too. This is something it’s already started to do at Amazon 4-star, a location in New York that sells a wide array of merchandise from stationary to cooking utensils. Amazon hasn’t been able to change the products its sells at Whole Foods stores as much because the grocery chain’s lease agreements say it must primarily sell food there. But it’s reportedly looking to launch a new grocery store business where it has more autonomy to pick what it wants to sell there.
For Amazon, the move into skin care offers it the opportunity to sell goods at higher margins than groceries. It could impact the likes of beauty brands such as Procter & Gamble’s Olay, Estee Lauder and Clinique, which make similar face serums and cleansing wipes, in addition to retail outlets like Sephora and Ulta, which also sell skin care.
The prestige beauty industry in the U.S. reached $18.8 billion last year, up 6 percent year over year, according to data from The NPD Group. Sales in the skin care category were up 13 percent, NPD Group said, contributing 60 percent of total industry gains. Skin care sales amounted to $5.6 billion in 2018.