Study: Amazon’s consumables sales on the upswing in Q3
Already experiencing steady double-digit growth, Amazon’s sales of consumables ramped up significantly in the third quarter of 2017.
According to new research from One Click Retail, Amazon’s sales of consumables, including health and personal care (HPC), grocery, beauty and pets, grew by an average of 80% across the United States, U.K., Germany, France and Canada, with the beauty and pets groups both doubling in size.
“This rapid growth will continue to gain momentum as more brand manufacturers focus on Amazon as a sales channel and Amazon continues to make big investments in consumables, such as its recent purchase of Whole Foods,” Nathan Rigby, VP of sales and marketing at One Click Retail.
Across all five countries, HPC was the largest of the four product groups, accounting for more than a third of Amazon’s total consumables sales. The largest growth rates again took place in the smaller markets of Canada and France. However, in Amazon’s most developed markets – the U.S. and U.K. – growth continues to increase, rising from 30% in Q1 and 40% in Q2 in both countries to 49% and 46% respectively, in Q3.
Baby care and nutrition remain the largest categories overall. Interestingly, the top category in most countries is nutrition, and the leading items across all countries are diapers and paper products.
“This is in part because there is a very wide variety of vitamins and supplements available in nutrition, which keep the sales for individual items relatively low for such a strong category,” said Rigby.
Online sales of beauty products have always been a challenge. Traditionally, because the cosmetics industry relies so heavily on experiential retail, high-end brands would focus on specialized brick-and-mortar outlets, and Amazon would only be a destination for inexpensive, mass market cosmetics. This remains a factor, as skin care is the leading category in four out of five countries, but the tide finally seems to be turning.
Prestige products were the fastest growers in both the U.K. and Germany, and two of the major growth categories in the U.S. were luxury cosmetics (69% growth) and luxury skin care (37% growth). In Canada, luxury skin care earned $300,000 in Q3. This was a far cry from the $25 million earned by the category in the U.S., but more than double the sales over the same period in 2016, the report said.
Sales are rising steadily across grocery, thanks to the company’s Amazon Fresh category, which generated $90 million in sales in the U.S. It’s also consistently growing at an average of 3% per week during the quarter. Half of fresh sales were split between dairy products and produce, followed by meat (including deli meats and seafood) with 18% of sales.
While it is still early, Rigby anticipates that Amazon’s recent purchase of Whole Foods to make a major impact on Amazon’s grocery category going forward.
Meanwhile, coffee and beverages remain the top categories across the board, and in all countries, many of the top items include coffee pods. However, the major growth driver in the Germany and the U.K. was spirits.
The pet category has always been driven by food, and it’s no different in Q3. Pet food and feeding supplies continues to be the fastest-growing category in both the U.S. and France, where it makes up two thirds of total product group sales. Pet Food now ranks as the top category in all five countries.
“Emerging e-commerce categories, such as spirits and luxury cosmetics, are capturing more of the buying public and brands adopting Amazon as a primary sales channel are experiencing great success,” Rigby said.
Discount retailer takes Google-based voice ordering program national
Target shoppers across the United States can now place an order using just their voice.
Deepening its relationship with Google, the discounter is expanding its Google Express program nationwide. The home delivery shopping service enables customers to use their Google Assistant in their Google Express app or website, Google Home device or Android TV to conduct voice-assisted shopping from a variety of retailers — including Target. The program’s breadth will expand even further next year when Google Assistant is available on eligible Android phones and iPhones, Target said.
The program, which started as a pilot in California and New York City, is now available across the continental U.S. Target shoppers who meet a $35 minimum are also eligible for free shipping. Orders are picked from Target store shelves, and arrive in two days, according to the retailer.
“In the markets where we’ve offered Google Express, guests tell us they love the ease and convenience of shopping Target through Google. So we’re excited to offer this service nationwide in time for the busy holiday season,” said Mike McNamara, Target’s chief information and digital officer.
The move comes on the heels of Walmart’s partnership with Google that makes hundreds of thousands of items available for voice shopping via Google Assistant. At the time of the deal, Walmart had the largest number of items currently offered by a retailer through the platform.
Not to be outdone, Target has even bigger plans for its collaboration with Google. “Target and Google teams are working on the next chapter, building experiences that digitally replicate the joy of shopping a Target store to discover stylish and affordable products,” McNamara said.
While details are still in the works, one experience set launch in 2018 includes using voice and other innovative solutions to strengthen the retailer’s style categories, such as home, apparel and beauty. Another service will enable Target customers to link their online accounts with Google. This will allow them to receive personalized recommendations, and quickly re-order merchandise based on past Target purchases.
Also planned for 2018 is the integration of the discounter’s REDcard credit and debit cards into the mix. This gives Google Express customers 5% off of most Target purchases, and entitles them to free shipping.
The partners are also working on a program that gives shoppers the option to pick up their orders at a Target store within two hours.
Camping World bolsters its brand portfolio — again
The largest U.S. chain dedicated to recreational vehicles is acquiring another company.
Camping World Holdings announced that it will purchase Uncle Dan’s Outfitters, a specialty retailer of outdoor gear, apparel and camping supplies. The new company will strengthen Camping World’s efforts to expand its presence in the broader outdoor lifestyle market.
Specifically, Camping World will use Uncle Dan’s Outfitters e-commerce platform to increase its customer reach and add new quality product offerings. Uncle Dan’s Outfitters will also serve as the official supplier of outdoor gear, apparel and camping supplies to the company’s rebranded Gander Outdoors retail stores across the country.
Gander Mountain, a retailer focused on hunting, fishing, camping, and outdoor gear, is one of Camping World’s many acquisitions over the last six months. In addition to acquiring certain assets of Gander Mountain, the company also acquired Overton’s, a boating and marine accessories company, and TheHouse.com, an online retailer specializing in bikes, sailboards, skateboards, wakeboards, snowboards and outdoor gear.
“Under the leadership of Brent Weiss and family for over 45 years, Uncle Dan’s Outfitters strengthens Camping World Holding’s efforts to build a seamless approach to the outdoor lifestyle market and further positions the company to expand the reach and product offerings of our e-commerce business,” said Marcus Lemonis, chairman of Camping World Holdings. “The management team not only possess strong knowledge of the outdoor outfitter market, but also has a keen eye for the development and invention of new product offerings.”