Summary
Amazon's house brand of CE accessories should translate into incremental revenue and profit and higher customer satisfaction. Having the right accessories from the moment consumers set up their electronics, backed by a retailer they trust, in packaging that's very easy to open (don't underestimate the aggravation factor traditional accessory packaging causes), at great value, is all good for Amazon and their customers.
Analysis
More so than biting into retail sales of Radio Shack in a big way though, Amazon's sales will likely be at the at the expense of their branded partners, like Monster Cable.
Attaching Amazon.com branded accessories to consumer electronics hardware bought on Amazon.com should be an easy attachment for the e-tailer. Assuming they can recommend the right product(s) to attach, at these price points it will be a no brainer for most buyers to click to add.
When selling consumer electronics, the most likely and most profitable time to sell accessories is as an attachment to the hardware. After that, more than a considered purchase, cables tend to be purchased when you realize you're missing one, or the one you have is defective, in which case you probably need to get it right away rather than ordering on line. And blank media tends to be either an impulse or opportunistic item - in both cases driven by promotional prices, frequently by the Office Super Stores; or, when you realize you've run out and need to get some fast - enter your neighborhood Walgreens or Radio Shack.
While Monster Cable has built a big profitable business incentivizing retailers and retail sales people to tell the Monster story and sell their premium priced cables and cords, at the end of the day most consumers have very little brand preference when it comes to cables and blank media. (Batteries are a different story.) As long as it is a trusted brand, and I would say Amazon is highly trusted brand by it's customers, price is the major consideration.
Cathy Stauffer consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
