Recently, Amazon.com Inc. launched its own new brand of pet products, called Wag on 2nd May 2018. The Wag brand with dry dog food, Amazon plans to expand the selection to include other pet supplies.
The Wag is available only to Amazon Prime subscribers, who pay monthly or annual fees in exchange for fast delivery as well as video and music streaming.
The move is a threat to Petco Animal Supplies Inc. and PetSmart Inc., which purchased Chewy.com last year for more than $3 billion, as well as big box retailers and supermarkets that sell pet supplies.
Dog food is a difficult item to sell profitably online because it’s heavy and expensive to ship. It appeals to Amazon as a product pet owners purchase frequently, keeping the online marketplace top of mind during buying decisions. It is also a major staple for grocery stores and retail competitor Walmart Inc., which has its own private label dog foods, including Ol’ Roy.
Wag.com, which was previously owned by Quidsi Inc., now redirects to Amazon’s pet supplies page, which includes a new icon for the private-label dog food. The e-commerce giant closed Quidsi last year, saying it couldn’t make a profit. Seattle-based Amazon purchased Quidsi, which also owned Diapers.com and Soap.com, for $545 million in 2011 to eliminate a competitor and gain customers.
“Pet products are among the fastest-growing online retail categories and Amazon is leading the way,” said David Sprinkle, research director for market research firm Packaged Facts, which published the report “Amazon Strategies and the Amazon Shopper.” “The scariest part for competitors is that recent news indicates the e-commerce juggernaut is still coming on strong and unabated in the U.S. pet industry, reaffirming its commitment to pet products and now pet food.”
According to Packaged Facts, Amazon’s pet product sales reached $2 billion in 2017, up 40% from the previous year. That number will almost inevitably continue to grow with Wag, reportedly the first step in a major expansion of Amazon’s pet products business. Wag joins Amazon’s list of private label brands in more than 70 markets available for purchase only by Amazon Prime members. Though priced to compete in the premium tier of the dog food segment, Packaged Facts notes that Wag’s cost slightly undercuts the cost of similar competing meat-first, grain-free premium brands such as Blue Wilderness.
U.S. pet owners will spend $72.1 billion on animals, care and supplies this year, with about $30 billion on pet food, according to the American Pet Products Association.
Read Also: The Future of Pet Ecommerce Industry
Amazon began selling pet beds and carriers under the AmazonBasics brand in 2016, with pet carrier sales totaling $2 million last year, according to a March report by One Click Retail, which monitors e-commerce sales.
Amazon’s other recent private-label pushes include bedroom, dining-room and office furniture under the Rivet and Stone & Beam lines. It also reintroduced its own diapers under the Mama Bear brand last year after killing a diaper brand three years earlier.
Reference: Supermarket News
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