Controversy Persists Over Amazon’s Use Of Data To Favor Its Knockoffs

Controversy Persists Over Amazon’s Use Of Data To Favor Its Knockoffs

The 800-pound gorilla that is Amazon
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.com finds itself coming off as a corporate bully when its private label teams find small and growing brand products and then produce knockoff versions that it sells at a considerable discount. The practice has led to calls of foul play by the brands it is copying and caught the attention of politicians and regulators who think the retailing, logistics and technology giant has crossed the antitrust behavior line.

CNBC reports on the experience of Peak Design, a supplier of camera bags and accessories that does most of its sales on Amazon’s platform. Peak discovered that its most popular item, the Everyday Sling Bag, had competition in the form of an AmazonBasics bag that used the same name.

“They copied the general shape, they copied the access points, they copied the charcoal color, and they copied the trapezoidal logo badge,” Peak CEO Peter Dering told CNBC. “But none of the fine details that make it a Peak Design bag were things that they could port over because those things take a lot more effort and cost.”

In an online discussion last week, some of the experts on the RetailWire BrainTrust saw Amazon’s private label aspirations, or its inspirations, as routine for the industry.

“Walk through the sample rooms of any retailer with a private label program and you will find a ton of items from an assortment of different brands,” wrote Gary Sankary, retail industry strategy at Esri. “They use those items to inspire and design their own products. Amazon is certainly no different. I believe, in this case, they are being called out unfairly by people who don’t understand how the private label business works.”

Some on RetailWire’s expert panel, though, noted differences in scale and execution.

“The difference between what Amazon is doing and what retailers have done for years (develop private brand products similar to others’ best sellers, hopefully without crossing an intellectual property line) is that Amazon owns or manages a ton of data,” wrote Dick Seesel, principal at Retailing In Focus. “When other brands use AWS or market their products on Amazon.com, they are providing sales data to Amazon whether they intended to or not. It’s a fine line between ‘retailers have always done this’ and unfair business practices.”

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For others, the line was definitely being crossed.

“How loudly can I yell FOUL PLAY…?!” wrote Jeff Sward, CEO at Merchandising Metrics. “It’s one thing for a buyer to do competitive research in the open market, trolling stores, malls and websites to see what the competition is doing. It’s a completely different behavior when Amazon knows sales and returns behavior at the SKU level. It’s despicable behavior. Makes me want to avoid buying Amazon private label product — ever — under any circumstances. Further thoughts unprintable.”

“Saying that it has always happened is an insult to every person who has had their livelihood affected by big companies knocking off their hard work,” wrote Georganne Bender, principal at Kizer & Bender Speaking. “The pirating of designs needs more attention and stronger regulation.”

Amazon’s bag, which sells at a fraction of Peak’s $90 price, led Mr. Dering and company to create a pushback video on YouTube.

“This is the Everyday Sling by Peak Design and this is the Everyday Sling by AmazonBasics,” says the video’s narrator. “It looks suspiciously like the Peak Design Everyday Sling, but you don’t have to pay for all those needless bells and whistles like years of research and development, recycled bluesign approved materials, a lifetime warranty, fairly paid factory workers and total carbon neutrality. Instead you just get a bag designed by the crack team at the AmazonBasics department.”

And though the video retort was in part a dig at Amazon’s ethics, for some BrainTrust members it was merely the right move from Peak Design in a game where everyone is playing by the rules.

“Amazon isn’t new to the copying game — it’s been going on for many years in retail,” wrote Jeff Weidauer, principal at SSR Retail. “Any successful seller will have to deal with it. Peak Design has done a great job of pointing out the differences, and to Peak’s core customer, those differences will matter. For those who buy the Amazon knock-off, they likely wouldn’t have been a Peak customer anyway.”

“As much as people don’t want to admit it, Amazon is not doing anything new, or predatory,” wrote Natalie Walkley, director at Korber & Enspire Commerce OMS. “Although it has to be frustrating for brand manufacturers. Kudos to Peak Design for poking fun at it and making an entertaining video. But I would argue that anyone wanting a $30 bag is not the same audience as folks purchasing a $90 bag, so my guess is the impact will be minimal for their target audience.”

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