L2’s Intelligence Report: Amazon finds that even though Amazon has the lowest prices for most listings across the five categories of Beauty, Fashion, Hair Care & Color, Personal Care and Watches & Jewelry, the discount percentage is often exaggerated. Ninety-five percent of Amazon Beauty listings are priced lower than any other retailer, but many Beauty ads inflate retail prices and claim to be selling at a discount. For example, a third-party seller on Amazon claims Bobbi Brown’s Hydrating Face Cream retails for $148.98 and offers it for $56 at a perceived discount of 62%. But the cream sells for $56 on the Bobbi Brown brand site as well. Brands distributing on Amazon have begun to take advantage of the brand’s low price reputation as well. Burberry, for example, lists four of its fragrance SKUs on Amazon at a higher price than the MSRP.
But for CPG products, the platform lists consistently low prices. Ninety-two percent of L’Oréal’s merchant listings and 87% of Procter & Gamble items were priced lower than any other retailer. In instances where Amazon did not have the lowest price, Walmart, Walgreens and Target with the culprits 16%, 12% and 11% percent of the time, respectively.
Best Buy, Target, Walmart, and Sears have started to chip away at Amazon’s position as a low-cost seller by offering price matching. And Amazon’s position as a low-price retailer holds strong only for smaller purchases; 70% of the time items priced above $100 are more expensive on Amazon. Therefore, it might not be long before holes start to form in the perception of Amazon as a destination for low-priced goods of all types.
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