The Supply Side: With annual Prime Day, Amazon grows CPG market share

Amazon’s annual Prime Day sales event has had a noticeable impact on the market share of consumer packaged goods (CPG) categories such as baby and beauty. According to a recent report from data marketer Numerator, the e-tail titan is taking share from competitors like Walmart and Target.

Over the past three years, Numerator found Amazon has grown CPG sales on Prime Day and retained the added share afterward. Amazon recently announced that the 2021 Prime Day event is slated for June 21-22.

Numerator data showed that in 2020 Amazon grew its CPG market share to 14.8% during the event that took place Oct. 13-14. The share rose from 3.6% the month prior. The strong Prime Day sales increased October’s monthly share to 4.2% that same year.

Amazon’s 2019 Prime Day event was July 15-16, and the company’s CPG market share rose to 14.5%, up from 2.6% the month prior. In July 2019, Amazon’s share of CPG sales was 3.3%. Likewise, on Prime Day in July 2018, the retailer’s CPG’s share of sales was 11.2%, rising from 2.1% the month before. Prime Day sales again lifted the monthly share in July 2018 to 2.7%, Numerator reports.

The research indicates Amazon’s CPG market share gains from Prime Day have come at the expense of Walmart, Costco, Kroger and Target, all of which lost share during Prime Day events in 2018, 2019 and 2020.

Walmart.com holds its Big Save Event, and Target features Deal Days sales events to try and mitigate the Amazon threat. The strategy worked well for Walmart and Target during Prime Day events over the past three years. Walmart.com and Costco.com held their share each year, while Target.com saw a 0.2% lift. Prime Day appears to have a halo effect for the three big online competitors to Amazon.

Numerator said the biggest share losers from Amazon Prime Day are smaller online and in-store retailers who conceded 8.3% of their combined market share in 2018. That loss grew to 9.7% in 2019 and was an 8.9% loss last year. While most CPG sales occur in physical stores, Walmart, Target, Costco, and Kroger each lost market share to Amazon’s Prime Day events in recent years.

Walmart stores saw market share dip 1.1% and 1% in 2019 and 2020, respectively. Target stores fared slightly better with share losses of 0.1% and 0.4% in the past two years. Costco lost 0.2% of its CPG market share from the 2019 Prime Day event and 0.8% last year. Kroger has trimmed in share losses to 0.6% in 2019 and 0.4% in 2020, the report states.

The report said Amazon has consistently grown its CPG market share from 2.1% in 2018 to 3.7% from the start of COVID-19 to 4.2% earlier this year. Since 2018 Amazon has seen CPG market share peak on Prime Day and then escalate higher on end-of-year Cyber weekend events. Since 2018, Amazon has doubled its CPG dollar sales through Prime Day and Cyber Weekend sales events.

CATEGORY WINNERS
Two categories where Amazon is gaining meaningful share are beauty and baby. Amazon had 21.1% of the baby category market share as of March 31, down slightly from 22.6% a year ago, but higher than 20.4% and 18.9% of market share in the two years prior.

Walmart and Target have focused more on the baby category in recent years, and each also benefited from COVID and more sales of consumables moving online with curbside pickup. Walmart and Target slightly grew baby market share in the past year.

Statista reports the estimated market revenue of baby care products in the U.S. will grow to $11.1 billion by 2025, which would be a 141% gain from the $4.6 billion the market was valued at in 2015. Diapers make up the most significant portion of U.S. baby care product sales valued at $4.86 billion last year, Statista reports. Roughly one-third of diaper sales come from mass merchants like Walmart and Target. About 17% of the diapers sales in the past two years took place online, Statista reports.

Analysts have predicted the shakeup in diaper share will continue into 2022 as prominent manufacturers Kimberly Clark and Procter & Gamble have said they intend to raise prices. Walmart accounts for 15% of Kimberly Clark’s sales, more than any other retailer. Walmart U.S. CEO John Furner said the retailer has the wherewithal to hold prices steady on consumables, and it plans to do so.

Amazon is also a significant threat in the health and beauty category for Walmart and Target, with 17.9% of the market share as of March. Since 2018, Amazon has grown its health and beauty market share from 11.9%, and while the share dipped this year from the 18.1% peak in 2020, analysts expect to see more sales in this category will move online.

In 2019, online health and retail beauty sales generated about $22.54 billion, 6.17% of total e-commerce sales before the pandemic. The category grew online sales by 13% from 2018 to 2019, according to Statista. Online beauty and personal care accounted for 11% of the category’s total revenue last year. Numerator notes that Amazon has the largest share of U.S. online beauty sales. However, most sales still occur in physical stores like mass retailers Walmart, Target and Walgreens, and specialty players like Ulta and Sephora.

Numerator also shows Amazon has grown share in the pet category. Market share was 10.6% in 2018, rising to 14.9% in 2020 and falling to 13.6% this year. Household products are a smaller business for Amazon growing to 8.7% this year, up from 5.5% in 2018. But the smallest of the CPG categories for Amazon is still grocery. That business has grown from a fractional 0.4% market share in 2018 to 0.9% in early 2021.

A report from TABS Analytics indicated that Walmart dominated the online grocery category with a 30% share in 2020. Grocery chains like Kroger, Albertsons, Publix and H-E-B held their market share amid the pandemic with a combined share of 15.3%, while Target conceded some share to 11.2% in 2020. The biggest winners were the online grocery sites like Instacart, Peapod and Fresh Direct. That cohort grew market share to 16.5% in 2020, up from 7.9% the year before.

Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Propak Logistics.