Six years after purchasing the competing online retailer for $545 million, Amazon is shuttering Quidsi, citing struggles to make the unit profitable. The decision will affect about 263 jobs in New Jersey, where the company is based, according to Bloomberg.
Quidsi is the owner of Diapers.com, Soap.com, Wag.com, BeautyBar.com, Casa.com, and YoYo.com. Its founder, Marc Lore, begrudgingly sold to Amazon amid a pricing war. He went on to found Jet.com and sold that to Walmart, where he now runs e-commerce. Read more from Bloomberg here.
It’s commonly accepted in bricks and mortar retail that to capture as much market share as possible, multi-brand formats are required. Retailers in fashion (Zara and HM) or grocery (Walmart and Tesco) operate under numerous brands whilst utilising a common backend infrastructure in product, warehousing and logistics. So, how about E-commerce?
Well, Amazon’s strategy of operating under the Amazon banner might be a hint at what’s to come. The marginal cost of software has perhaps fooled companies into a broader brand portfolio when in fact, it pays to be singularly focused on your flagship brand. After all, even if you continue to operate multiple brands, applying the 80:20 rule, it’s usually that one flagship brand that makes the vast majority of revenues/profits.
What do you think? Should you put all your resources behind one brand or spread risk and capture market share with multi-brand? Let us know in the comments.