Amazon concedes market share in battle for online consumer goods sales

Amazon remains the undisputed leader in online sales of consumer packaged goods (CPG) with 39% market share, but that’s down from 43% in 2017, according to a Nielsen report. Instacart, Chewy, Walmart and Kroger each increased their share of online CPG sales in the same period.

Instacart doubled its share from 4% to 8% and Walmart tripled its share from 2% to 6% over the past two years. Target grew its share by 1% to 3% and Kroger more than doubled its share to 5%, up from 2% in 2017.

Nielsen noted Amazon still continues to dictate the pace of change, driving a third of all growth experienced in CPG e-commerce since early 2017.

“Despite such impressive growth contributions, Amazon’s share has declined because of the success in consumers’ collective adoption of digital commerce in CPG. It’s a bit of a win-win scenario,” Nielsen noted. “Yes, Amazon is still on a level of its own, bringing in 33% of all dollar gains in CPG e-commerce. However, the other 66% of growth is a true testament to positive change for other players that are actively investing in their online operations.”

Two years ago CPG e-commerce sales totaled roughly $37 billion, but has grown to $65 billion. Amazon’s share of that growth is 33%. Instacart’s stake is 13% and Walmart’s share is 11%, according to Nielsen. Chewy, Kroger and Target command shares of 9%, 8% and 5%, respectively. All other retailers hold a 21% share of the total market.

The bulk of Amazon’s CPG sales growth is from branded products and not private label, according to eMarketer. The industry estimates just 1% of Amazon’s CPG sales from its private-label products, while other retailers like Walmart and Kroger see 13% to 29% of their sales coming from private brands.

Nielsen said expansion of Click-and-collect – also known as online grocery pickup – is helping retailers like Kroger and Walmart grow their online CPG share. Two years ago the online grocery pickup share was just 4% of total CPG e-commerce, but is now up to 11%. Nielsen said online fulfillment for CPG e-commerce has been redefined across America with an expansive array of options such as timely delivery, pick-up locations such as lockers, to curbside and drive-thru pickup.

The report found one in 10 surveyed using in-store click-and-collect purchasing in the U.S., which remains behind global adoption. In India, 29% use click-and-collect and 27% of Vietnamese and 26% of Chinese shoppers use store pickup options. Nielsen said there is additional room for retailers like Walmart and Kroger to gain more share as they continue to add locations for online grocery pickup.

Walmart will have online grocery pickup available at more than 3,000 of its stores by the end of the year. Cowen reports at least 15% of consumers have tried click-and-collect. Walmart executives have said customers who use online grocery pickup also shop in stores. The retailer said its strategy is not either/or but to give consumers more choices in how they shop for and take delivery of food, consumables and general merchandise.