A Tale of 2 Brands: Macy’s Ramps Up Private Labels as Amazon Backs Away

While Macy’s is making its plans public to enhance its private business, Amazon is reducing its focus on private-label operations.

This summer, Macy’s announced its plans to launch four private brands by the end of 2025. The first brand, called “On 34th,” is scheduled to debut on Aug. 17, available both in physical stores and online, including through Macy’s app.

On 34th footwear will become available in spring 2024. Macy’s aims to introduce multiple private brands in 2024, encompassing various categories such as apparel and accessories.

PYMNTS reported on the upcoming launch in July noting a differentiator — its approach to sizing.

In the report, PYMTS asked: “If a coat or a pair pants were tailored to your body, what’s the likelihood of you returning it? Probably slim. But what if tailoring wasn’t an option and relying on what the retail industry has to offer for your body type was the only option?”

Customized fits or items designed to feel like they were specifically suited to your body were associated with lower return rates. But within the realm of fashion, the perfect fit has posed a hurdle. Countless individuals have felt the letdown of buying clothing via the internet or in physical outlets, only to realize that the fit falls short. This leads to negative perceptions of brands and a rise in returns.

So Macy’s is launching On 34th, in honor of its Manhattan flagship store, with a mission to fill this particular gap.

The launch is a continuation of Macy’s efforts to reassess its 25 private-label brands, substituting some while revitalizing others.

Read more: Macy’s, Nike Launch Inclusive Fits for Decreased Returns

Meanwhile, Amazon is reducing its private-label operations, leading to the discontinuation of numerous in-house brands.

The move coincides with the retail behemoth’s efforts to ward off antitrust measures, bolster earnings, and trim expenses, as reported by The Wall Street Journal on Aug. 10.

“We always make decisions based on what our customers want, and we’ve learned that customers seek out our biggest brands — like Amazon Basics and Amazon Essentials — for great value with high quality products at great price points,” said  Matt Taddy, vice president of Amazon Private Brands in a statement provided to PYMNTS at the time of the announcement. “We’re thoughtful about our private brand selection, and if there are products that aren’t resonating with customers, we deprecate those items and look for other opportunities to better meet their needs.”

While keeping Amazon Basics and Amazon Essentials, the company will gradually discontinue several of its other proprietary brands.

Over the last year, Amazon has opted to discontinue 27 out of its 30 clothing brands, intending to keep only the remaining three, as indicated in the report. Additionally, the company is gradually discontinuing two of its private-label furniture brands, Rivet and Stone & Beam, once their inventory is depleted.

In 2020, Amazon boasted 243,000 items spanning 45 proprietary brands, as revealed in an Amazon disclosure mentioned in the report. Following the reduction of house brands to less than 20, Amazon has also phased out tens of thousands of products that were previously part of their offerings.

Read more: Amazon Scales Back Private-Label Business

So Macy’s is capitalizing on personalization through its new private brands seeking a chance to gain consumer loyalty and decrease return rates.

Amazon is pursuing an alternative strategy by reducing its private-label products, which aligns with the company’s cost-saving endeavors since the decline in eCommerce sales following the pandemic.

Ultimately, both Macy’s and Amazon are responding to market dynamics in their own ways, with Macy’s focusing on personalization, while Amazon is streamlining its offerings.