What: In an opinion piece, Coresight reviews what the reduction of Amazon’s number of private labels could mean for retail.

Why it is important: Private labels are a source of margin and traffic as long as the retailer is not growing too big, which is the case for Amazon, which was forced to shut down a number of labels for antitrust reasons.

Amazon is reportedly reducing its collection of private labels in the US market, consolidating from 30 clothing brands to just three: Amazon Essentials, Amazon Collection, and Amazon Aware.

This move is in contrast to the trend of many retailers embracing private label brands as a way to boost sales and margins. While private labels remain successful for some retailers like Target, others are shifting focus away from them, emphasizing branded products that resonate with consumers' lifestyles.

Amazon's private brands have seen significant penetration in the fashion category, with around one-quarter of apparel shoppers on Amazon.com buying from its private labels. The contraction in Amazon's private brands is likely to impact its appeal in the fashion sector, but the abundance of other brands on its platform may mitigate the effect.

There go Amazon’s Private labels