Amazon Analytics 2018

Amazon Analytics 2018


INTRODUCTION

See how Amazon is trailblazing the e-commerce spectrum and beyond:

  • The $13.7 billion acquisition of Whole Foods, in June 2017, signified Amazon’s serious bid into the groceries and brick-and-mortar space. 
  • Prime Day 2018, 36 hours of exclusive deals on July 16/17, further displayed Amazon’s e-tailing dominance.
  • Over 17 million transactions were processed on Amazon over Prime Day, accounting for 86% of all transactions among the top 50 retailers.

In this report, Hitwise assesses Amazon’s dominance in the US. We’ll break down: 

  • Amazon vs. Top 50 Retailers
  • Prime Day Highlights
  • Trends and Tactics for Retailers and Brands.

What’s Inside

PART ONE

Amazon vs. Top 50 Retailers

PART TWO

Prime Day Highlights and Trends

PART THREE

Tactics for Retailers and Brands


PART ONE

Amazon vs Top 50 Retailers

Breaking down Amazon’s visits, transactions and conversions: how do these compare to leading US retailers?

Visit Share 

The US retail landscape is dominated by a handful of players:

  • Over the past year, the top 50 online retailers drove 73% of Hitwise Retail 500 traffic.
  • Amazon alone generated an impressive 44% of traffic share among the top 50 retailers. 
  • This visit share was larger than the next 14 retailers combined!

Visit Share to Top 50 Retailer Sites:
How much does Amazon dominate online?

Visit Share to Top 50 Retailer Sites
Source: Hitwise, Share of total visits among Retail 50, August 2017-July 2018

Transaction Share

Zooming into online transactions, Amazon’s dominance is clear:

  • Amazon accounted for 76% of all online transactions among the top 50 retailers over the past year. 

Amazon’s transaction share, however, varies over the course of the year:

  • Amazon’s share grew to 79% in July and 80% in January this year.
  • November saw the e-tailer’s lowest share at 67%, due to Cyber Week competition.

Transaction Share to Top 50 Retailer Sites
How much does Amazon dominate online?

Transaction Share to Top 50 Retailer Sites
Source: Hitwise, Share of total purchases among Retail 50, August 2017-July 2018

Conversion Rates

Amazon also converts more visitors to purchase online:

  • Amazon’s 6.6% conversion rate dominated the next 14 retailers. 
  • Their conversion rate was 35% higher than the next closest retailer, the online photo powerhouse Shutterfly. 
  • Amazon also converts 181% higher than the average of the other top 14 retail sites.

Conversion Rate of Top 15 Retailers
Top 15 based on Transaction Share

Conversion Rate of Top 15 Retailers
Source: Hitwise, Average conversion rate among Hitwise 50, August 2017-July 2018

Amazon’s Ambitions

Amazon acquired companies at an unprecedented rate in the past year:

  • Whole Foods has strengthened Amazon’s groceries proposition and amplified their store presence.
  • Body Labs, Blink, and Ring propelled their smart home offerings.
  • Pillpack highlighted Amazon’s pharmaceutical aspirations.

Growth-focused acquisitions in the past year

Amazon's Growth-Focused Acquisitions

Amazon-Only Buyers

Amazon-only buyers has grown by 22%, from December to July.

  • With 38.5 million Americans, Amazon captured 54% of US buyers shopping at top 50 retail sites in December. 
  • This figure grew to 47.3 million Americans, equating to 70% share in July, thanks to Prime Day. 
  • Other retailers are losing out on share and consideration. Walmart, Target, Best Buy and Apple all saw declines in visits from Amazon-only buyers.

Amazon-Only Buyers
Audience Size and Overlap with Top Retailers

Amazon-Only Buyers: Audience Size & Overlap

KEY TAKEAWAY

Amazon’s transactions and conversions demonstrate their dominance. Amazon’s recent acquisitions also show their growth plans. In the next chapter, we look at the impact of Amazon Prime Day, but also how some retailers are fighting back.

PART TWO

Amazon Prime Day Highlights and Trends

As Prime Day continues to grow, which products drove Amazon’s rise, and how are other retailers leveraging this mid-summer sale?

Prime Day 2018

The estimated $3.5B in global sales set an Amazon single-day record. 

  • Prime Day transactions (on July 16 and 17) were 9% higher than Black Friday and Cyber Monday combined, despite 1% fewer visits. 
  • This implies that Prime members are more purchase-focused on Prime Day, than Amazon visitors on Black Friday and Cyber Monday.

Visits and Transactions on Amazon
Black Friday and Cyber Monday 2017 vs Prime Day 2018 (in millions)

Black Friday & Cyber Monday 2017 vs. Prime Day 2018
Source: Hitwise, Total visits and total transactions for select days

Prime Day YOY

Increasing Prime Day hours from 30 (in 2017) to 36 (in 2018) led to a 16% increase in transactions. 

  • Transactions on 2018 Prime Day itself were slightly below Prime Day 2017. 
  • But thanks to a significant increase the day before, the combined total of transactions over the two days (PD-1 and Prime Day) reached 17.2 million.

Transactions on Amazon
Prime Day YOY (in millions)

Prime Day YoY Transactions on Amazon
Source: Hitwise. YoY = Prime Day 2017 (10-11 July) was six calendar days earlier than Prime Day 2018 (16-17 July). YoY dates are lined up by the number of days leading up to Prime Day.

Top Purchases

Amazon’s own products were the most discounted; not surprisingly, these products dominated sales figures.

  • 6 of the top 10 most-purchased items were Amazon products.
  • We expect this dominance to continue for the next big promotional period, Cyber Week.

Top Product Purchases on Amazon
Prime Day (July 16/17)

Top Prime Day 2018 Product Purchases on Amazon
Source: Hitwise. YoY = Prime Day 2017 (10-11 July) was six calendar days earlier than Prime Day 2018 (16-17 July). YoY dates are lined up by the number of days leading up to Prime Day.

Internal Search

Searches within Amazon show what customers were actively seeking prior to purchase.

  • With early deals focused on Amazon devices, it’s no surprise that searches for Amazon devices grew by 1052% WoW. 
  • Prime Day advertising also heavily featured electronics and computers. These categories saw 100%+ rises in search WoW. 
  • But Amazon didn’t succeed in lifting all of its categories. WoW internal searches actually declined for pets, automotive, and Amazon Fresh categories.

Internal Search on Amazon
Prime Day, compared to previous week

Prime Day 2018 Internal Search on Amazon
Source: Hitwise. YoY = Prime Day 2017 (10-11 July) was six calendar days earlier than Prime Day 2018 (16-17 July). YoY dates are lined up by the number of days leading up to Prime Day.

Halo Effect

More retailers are getting on board with the mid-summer sale.

  • Transactions among the top 10 retailers were up 78% on Prime Day compared to the previous week, though Amazon still commanded with 86% share of transactions. 
  • Target’s response, a one-day sale, drove was also a success. Although smaller in volumes, Target saw the largest relative increase in visits and transactions. 
  • Not all retailers were smiling; Home Depot fared worse WoW.

Amazon vs. Retailers
Prime Day, compared to previous week

Prime Day 2018: Amazon vs. Retailers

SO WHAT?

Prime Day showed Amazon’s influence, particularly in driving sales for its own products, as well as computers and electronics. But other retailers, like Target, are countering with their own promos and seeing big numbers. Consider this a preview for Cyber Week!

PART THREE 

Tactics for Retailers and Brands 

See how the playbook has changed as companies aim to compete against (or collaborate better with) Amazon.

1. Understanding Amazon’s Movements By Category

Step One: Track Amazon’s category performance.

  • Amazon’s strongest categories in the past eight months were: Books, Home & Garden, and Electronics.
  • But since January ’18, Home, Sports, and Clothing have grown substantially.
    • Some growth is seasonal.
    • But Amazon initiatives like Wardrobe show they want to be players in these categories.
  • In contrast, Amazon’s Food & Grocery are down on the year, despite their massive Whole Foods acquisition.

Transaction Share by Category, on Amazon
Nov 2017 – June 2018

Transaction Share by Category on Amazon
Source: Hitwise

2. Keep an eye on Amazon’s Private Labels

Step Two: Identify brands and products that are driving category growth.

  • In June, many of Amazon’s house brands and private labels dominated their respective categories.
  • Amazon has 60+ private labels and this number is continually growing.
  • Retailers and brands should monitor which Amazon’s house brands are converting and why.
    • Essentials and Basics are top-performing, but Amazon will likely expand into higher-priced categories.

Top Selling Brands by Category, on Amazon
Transaction Share, June 2018

Top-Selling Brands by Category on Amazon, June 2018
Source: Hitwise

3. Track customer demand through internal search

Step Three: Understand what Amazon’s customers are purchasing, and why.

  • Product searches within Amazon provide key insights into customer intent.
  • Zooming into the Clothing category, generic searches still dominate, but demand for branded items like Adidas is growing.
  • Companies can leverage these takeaways to determine what products to push on Amazon (as a brand), or how to compete (as a retailer).

Amazon Internal Searches for: Clothing, Shoes & Accessories
June 2018

Amazon Internal Searches for Clothing, Shoes and Accessories, June 2018
Source: Hitwise, Internal Searches on Amazon’s Clothing, Shoes & Accessories category, June 2018.

SUMMARY

Final Thoughts

Prime Day 2018 results show that Amazon is dominating, but still has room to grow.

Their recent acquisitions show they’ve set their sights beyond traditional retail categories, like Books and Electronics.

Some ventures have worked; their Clothing and Outdoor categories were propelled by Amazon’s house brands and key footwear labels. But Food & Grocery has yet to take off, despite their massive Whole Foods acquisition.

Success stories like Target show that retailers can fight back, and have benefited from a halo effect.

The key lies in having the right data resources and processes to act.

In this report, we’ve unveiled Amazon’s data “black box”, showing insights into: Amazon’s category, brand and product performance, top of the funnel metrics like internal search, and bottom of the funnel data, like final purchase.

By unlocking Amazon’s “black box”, retailers can make more informed decisions on how to defend and grow their online share, boost customer engagement, and drive overall sales.


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