L2 Researcher Mabel McLean presented a preview of our upcoming Intelligence Report: Amazon at the L2 Amazon Clinic at the Kaufman Management Center at NYU Stern today. The report will track the presence of 250 beauty, fashion, personal care, home care, watches and jewelry, and hair care brands on Amazon.
At the preview, McLean revealed findings about 85 brands present on Amazon, 20.5% of which are official distributors on the site. McLean’s presentation shows just how much leverage Amazon has on getting the other 79.5% to engage. A search for unofficial Amazon distributors brought up a list of affiliated links to gray-market retailers and unrelated advertisements. Pricing was often misrepresented on these pages. For example, a gray-market e-tailer claimed it sold Dior mascara for $33 at a discount from the retail price of $53, when in fact the official price was $28 at Sephora.
In contrast, pages of official distributors had a clean, ad-free appearance and allowed consumers to choose between several brand-approved direct distributors. An extreme example of control over Amazon presence is Kiehl’s, who has been able to redirect all Amazon retail traffic to its brand site.
L2 Founder and CEO Scott Galloway described Amazon’s differential policy towards various retailers as “Pay to Play.” Stay tuned for the release of the L2 Intelligence Report: Amazon in March for more facts and analysis about the e-tailer.