Amazon’s private-label business has received plenty of attention in the wake of its recently disclosed plan to carry newly-owned Whole Foods’ 365 and other private-label products. But grocery isn’t where the biggest surprise is.
Among some 20 private-label brands Amazon owns, more than half of which debuted last year, three of the top nine fastest-growing brands in the first half were in the fashion department. The Scout + Ro kids' line jumped 542% year over year, the Franklin & Freeman men’s shoe line rose 153% and women's apparel line Lark & Ro saw gains of 84%, according to a 1010data study published in August.
Three Amazon labels—Lark & Ro, Buttoned Down men’s apparel and the Amazon Essentials basics line—are among its 10 top-selling private-label brands, the study found. 1010data said its research also showed that Amazon-owned fashion brands including James & Erin, Paris Sunday and Lark & Ro are attracting new customers from consumers who are doing generic searches for, say, dresses on Amazon.
Amazon has said that apparel will be a key growth driver. Private-label brands are a key part of its fashion focus not only because they can offer a higher gross margin but also because they are a way to differentiate Amazon from other retailers. Many other traditional fashion retailers from Macy’s to Nordstrom also are keen on their store brands.
Private-label apparel and shoe sales saw a 5.4% average annual growth rate between 2011 and 2016—double the rate of the average industry growth, according to Euromonitor data.
A Morgan Stanley study earlier this year showed that Amazon, including its marketplace sellers, is already the No. 2 US apparel seller, generating $20.3 billion in clothing gross merchandise value and garnering a 7.4% share of the overall 2016 US apparel market—second only to Walmart at 8.1%.