CPG eCommerce Growth – Are We Purchasing More Online?
At Jumpshot, we strive to maintain a pulse on key industries and marketplaces. Recently there has been a lot of speculation and interest surrounding Consumer Packaged Goods (CPG). We decided to join the conversation and unlock the truth behind the growth of CPG. We recently analyzed our data to identify trends in online shopping within the CPG market and published The CPG eCommerce Landscape: Upstart Retailers Could Mean Downwind Challenges for Amazon data report. Here are a few key takeaways covered in the data report.
Amazon May Be Starting to See Real Competition
To nobody’s surprise, Amazon has kept its crown in CPG among eCommerce sites, accounting for 74% of CPG digital transactions.
But this title may be short-lived in certain categories like Snacks & Granola Bars and Dog Food, where sales have shrunk by nearly 20%. While Amazon’s dominance in certain categories might be declining, the categories themselves have shown growth.
Amazon is beefing up its own private label, AmazonBasics, across many categories, as the retailer seems to have figured out the perfect formula for maximizing eCommerce sales through sponsored listings, where CPG products do exceptionally well.
Its popular Amazon Prime Day, which takes place every July, actually gains slightly more traction than Amazon’sBlack Friday sale, though the brand did struggle a little this year, thanks to competitors offering their own deals days and a less-than-rockstar streaming concert that didn’t drive sales the way Amazon had hoped.
Amazon continues to see steady CPG sales, though they have slipped since 2017 when the eCommerce giant raked in more than 80% of total CPG transactions online. Time will tell whether Amazon can withstand some healthy competition.
Trends in Specific Categories
While we can’t dive deeply into every CPG category, a few stood out to us in terms of interesting trends.
Household Essentials – Battle of the Detergents
You may give little thought to the Detergent market (as long as it gets your clothes clean), but we found a few interesting facts in this category. Tide was the leader in eCommerce sales volume across all retailers in Q2 2019, winning nearly a third of all purchases online.
Tide customers are loyal (really loyal): only 20% of shoppers who viewed a Tide product online considered purchasing another brand, but among the top five other brands in the Detergent category (Arm & Hammer, All, Gain, and Seventh Generation), one-third of shoppers also considered a competing product.
Although more than half of detergent sales went to these five brands, 42% of all purchases in the category were of other brands.
Beverages – Amazon Who?
One category that Amazon has seen some declines in is the Soft Drink category, although the retailer has 10X more transactions than any other competitor. Sales are stable on amazon.com for Beverages, though walmart.com, instacart.com, and target.com have seen some growth.
There are few surprises in terms of which soft drink brands are selling online (Coca-Cola, Pepsi, Diet Coke, and Mountain Dew), but we do see one underdog contender in this space–no-sugar brand Zevia saw approximately 9% of all online sales over the past two and a half years.
In general, Soft Drink sales are flat, especially when compared to Sparkling Water, whose skyrocketing growth may be attributed to consumers being more health-conscious and consuming less sugar.
Health – Beyond Amazon with Super Charged DTC Brands
One retail category to pay attention to is direct-to-consumer (D2C) brands. Brands like Care/of, Ritual, and Olly saw an uptick in traffic comparable to product views on some leading retail sites, although Amazon.com and Walmart.com still dominate traffic for retail site product views.
D2C Vitamin brands are seeing stable traffic this year, though conversion rates are still lower than they are on traditional retail sites. We expect D2C brands within the vitamin category and others to take note from companies like Quip and Casper, who are realizing the benefits of partnering with larger retailers like Target.
Pet Food – Chewy Gives Amazon a Run for Its Money
Another category where Amazon may be sweating a little is within Pet Food and Supplies. Chewy.com saw 37% of all Q2 2019 transactions showing promising YoY growth. In 2018 the retailer was at 27%. For now, Amazon is on top, but that may change since Chewy.com is investing heavily in paid search advertising. For example, 83% of Chewy’s paid search traffic was for Blue Buffalo pet products. For Amazon, less than half of the search traffic for Blue Buffalo is paid.
Comprehensive Data on the Digital Journey
It’s clear that the landscape for Consumer Packaged Goods is changing, thanks to technology and rising competition. But it’s data—like the Jumpshot Insights Tool provides—that can help you get competitive analytics for every brand and retailer in the eCommerce space so that you can make strategic decisions about how to grow your business.
We collect eCommerce sales data from a global panel of 100 million devices, tracking 5 billion daily actions and consumer decisions, providing both a big picture and a granular perspective of the digital journey. This information helps you understand who you are losing customers to and who your true competitors are with in-depth analysis of the path-to-purchase.