RetailTechNews’ weekly Amazon watch brings you some of the company’s biggest moves from the past seven days, analysing how the giant is revolutionising the retail space. In this week’s edition: The State of the Amazon Marketplace; Smart Speakers to Surpass Wearables; and Cosmetics Sector Showing Resistance.
The State of the Amazon Marketplace
While Amazon remains the leading marketplace for third-party sellers, eBay has lost notable ground over the last year, with 52% of surveyed Amazon merchants also selling on eBay in 2018, down from 65% in 2017. Over that same time period, Walmart and Jet’s combined share has grown from 17% to 25% and aligns with Walmart’s renewed investment in e-commerce and consumer preferences.
Respondents who sell on their own website in addition to Amazon decreased from 39% in 2017 to 35% in 2018. This suggests that sellers are becoming increasingly Amazon-centric and shifting away from their personal online storefronts, because they simply cannot hold a candle to Amazon and the profitability they experience on the marketplace.
The report also shows that last year, 68% of seller respondents did not make any revenue off of private labels. This year, that number dropped to 44% of sellers. Our data also shows that adding private labels to their product mix is the second-highest priority business goal for sellers in 2018, with 38% of sellers selecting it as an initiative.
Smart Speakers to Surpass Wearables
The number of U.S. smart-speaker users will rise at a compound annual growth rate (CAGR) of 47.9% between 2016 and 2020, from 16.0 million to 76.5 million, according to eMarketer.
Uptake has been so strong that the number of adult smart-speaker users will surpass that of wearable users for the first time this year. The average smart speaker user profile is still that of an early tech-adopter: an affluent, older millennial male. But the gap is narrowing quickly as the device gains traction among other demographic groups, particularly younger Gen X women with children.
While Amazon’s Echo – with its integrated voice assistant, Alexa – is the most popular smart speaker in the U.S., it is losing share as speaker rivalry heats up. Google Home is second; and its launch of a lower-cost model in late 2017 will help it gain share from Amazon. Meanwhile, Apple’s HomePod has yet to make a dent in the market, mainly because of its high price tag.
Consumers are still most likely to use voice assistants on smartphones; but the technology is being integrated into other smart-home devices ranging from mirrors to lights and alarm systems.
Overall, the report predicts that 91 million people, or 27.6% of the U.S. population, will use a voice assistant via any device at least once per month in 2018.
Cosmetics Sector Showing Resistance
Amazon’s major play in the cosmetics sector shouldn’t worry the industry’s major players, suggests a UBS report.
In Beauty & Personal Care, each of the top 10 categories on Amazon’s U.S. store are growing by at least 24% year-on-year, with some categories nearly doubling in size since the first quarter of 2017. Luxury products are particularly strong, growing at 57% in the first quarter of this year, versus an increase of 30% for the total beauty segment, according to data source One Click Retail.
However, leading beauty brand Ulta is still growing even as Amazon aggressively expands, powered by a combination of new store openings, exclusive product selection, and a successful loyalty programme that supports e-commerce and prestige purchasing.
According to UBS data, Ulta has grown from 1% of the beauty industry to 4.2% since 2008. Over the last two years, Ulta has picked up 30% of the industry dollar growth and is forecasted to reach a market share of 6.6% in 2022, through a combination of store and e-commerce growth. Cosmetics make up 51% of Ulta’s sales, which is the category where Amazon sees its lowest relative growth.
This content was originally published in RetailTechNews.