While tech giants come under increasing scrutiny over their market power, Amazon has started to remove some the promotional ads for some of its private label brands on its website, according to a report by CNBC.
Amazon’s aggressive marketing of its own brands has led to concerns among third-party sellers that sell competing products on the marketplace. The company’s strong grip on the US retail sector has been under scrutiny for quite some time and the pressure intensified last month, when Massachusetts senator and Democratic presidential primary candidate Elizabeth Warren announced that there was a need to break up tech giants like Amazon, Facebook in order to reduce their economic dominance and it will be a major part of her presidential campaign.
Amazon’s private promotions started showing up nearly a year ago and it intensified with the passage of time and these private label products started showing in highly visible areas of the page, such as the top of search results or next to the “buy box” of a competitor’s product page. But things have started to change and the company has started to slowly scale down or relocate on-site promotions for its private label products.
In an email to CNBC, one of the spokesperson of Amazon said that the spots were a part of a broader experiment and the company keeps on testing different types of product placements throughout the year.
“We are always testing different experiences in order to provide more convenience, more efficiency and more options for customers while shopping our stores,” the spokesperson added.
Amazon’s view is that this practice is good for competition and customers and is a general trend followed by retailers to look at best-selling products when making decisions around what private label products to launch.
The report by CNBC further notes that despite an aggressive promotion, the private label products have met with very less success and amount to only one percent of the total retail sales. According to market research firm Marketplace Pulse only a few products, like batteries, have been successful, while the rest have mostly failed to incite any interest among customers.