ResearchFarm reveals the online winners from the key Christmas trading period (US)

Amazon’s is famous for being secretive about its best sellers and 3P sales performance. This is why ResearchFarm created its very own in-house algorithm for data mining. After collecting two years worth of Amazon best seller data we now want to share our insights into the online giant.

In this blog post we focus on specific brands which performed particularly well on the marketplace. We also highlight the key strategies of major FMCG companies willing to win market share.

Today’s post is about the performance of five categories in the US market (Amazon.com) during the key online trading period, the Christmas holidays.

BOOKS

US online shoppers tried to cheer up their children, to de-stress and become healthier.

In December 2015 the best selling book was the surprisingly cheap ‘Laugh-Out-Loud Jokes for Kids’, which sold for an average of $0.24. 78 sellers offered the number one best seller, with Amazon winning the ‘Buy box’ most often.

The trend towards coloring books continued (6 of the top 10). Many of these books are offered by independent publishers, with ‘Dover Publications’ and ‘Laurence King Publishing’ among the most visible companies.

Meanwhile ‘Health, Fitness & Dieting’ was the best performing category with 32 books, followed by the ‘Comics & Graphic Novels’.

CONSUMER ELECTRONICS

The best selling item in December was a Kingston memory card for cameras, tablets etc. Relatively cheap items, such as phone accessories and Bluetooth gadgets often occupy the first ranks in the CE category.

CE is highly competitive online, which means price fluctuation is low. As 3P sellers compete for the buy box, they stick to their best prices. Such an environment is favorable for unique product and private label.

Amazon has got this right and the most popular brand in December in the CE category was… AmazonBasics! Besides that, 40% of the ‘Buy Now’ boxes were 1P items.

Amazon is also the go-to destination for small CE products like ink cartridges. Players like Canon, Epson, HP or Brother have a high market share in this category.

TOYS

In December the average price for a toy was about $18 in the US.

The ‘Melissa & Doug’ brand performed extremely well with many items in the Top 10. This was partly due to an aggressive pricing strategy, with the company discounting one of their most expensive toys (table and 2 chairs set) from $93 to $72 ten days before Christmas.

Competitor VTech’s pricing strategy was similar, with a $10 price hike for the ‘Sit-to-Stand Learning Walker’ as soon as Christmas was over.

With a high number of best selling items, VTech has been the category leader for many months, followed by Crayola and Hasbro.

Amazon (1P) sells around two thirds of the best selling toys, which is a much higher share than in the CE category.

GROCERY

US shoppers did not buy their special Christmas groceries from Amazon, as the Christmas best sellers were essentially the same as in other months.

The best seller in grocery were coffee capsules and pods offered by CrazyCups, an alternative to Keurig, which ranked fourth.

Coffee capsules (from Keurig, Nespresso, San Francisco Bay Coffee…) outperform online, as they are easy to order and have a long shelf life. This makes them flexible to stock for both the shopper and Amazon.

PANTRY

Amazon second grocery business, pantry also showed no significant holiday impact.

Pantry best sellers have an extremely low average price with $2.94. Best sellers such as Oreo biscuits, Pringles or Heinz Ketchup are all sold exclusively through Amazon 1P.

The big brands in Amazon Pantry are Amy’s, which is doing very well with its soups, Campbell Soup, General Mills and Kraft. All these brands offer a high number of products and have a high share of the online shelf.

CONCLUSION

1) On Amazon disruption is the key. This disruption can come from new players such as the independent book publishers or from me too products, offering alternatives to well established players like Keurig/Nespresso.

2) The more mature online categories have higher competition levels which require tight pricing strategies. Once a category has matured enough, Amazon usually enters the game itself. With its refined logistics, buying power and scale Amazon 1P then shrinks prices even further.

3) The rise of private labels in regular bricks & mortar retailers is set to see a repeat on Amazon. Whilst Toys or Pantry seem safe for now, the CE category points to a future with a strong market share of AmazonBasics products.