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Advancing Alongside Amazon • How retailers can compete • How brands can partner and grow US | 2019
AdvancingAlongside Amazon• How retailers can compete• How brands can partner and grow
US | 2019
Advancing Alongside Amazon - US | 2
Advancing Alongside AmazonOne-click shopping, two-day free shipping, and
Prime Day are just a few of the pioneering activities
of Amazon that have forever changed the retail
landscape.
Despite their lead, Amazon still lacks prowess with
certain demographics and in key categories.
How can retailers and brands take advantage of these
gaps in Amazon’s strategy?
In this report, Hitwise will answer:• What can competing retailers do to close the
gap?
• Which categories can they differentiate themselves in?
• How can brands grow search share and product sales on Amazon?
INTRODUCTION
Top Amazon Stats July 2018 – June 2019
Annual VisitsAmericans only bought from Amazon during 2018 Holiday Season
Transactions on Prime Day
Transaction Share of Top 50 retailers during 2018
Holiday Season
YoY Growth in Internal Searcheson Amazon on Prime Day
Prime Members in the US*
Amazon Devices sold on Prime Day
*CIRP Study, 2018.
22.2B40M
20.2M72%
+10%
+100M
+3M
Advancing Alongside Amazon - US | 3
Do you know which audiences prefer shopping with you compared to the competition?
Do you know which retailers to partner with based on your target demographic?
Do you know which categories you’re outpacing the market on? Which ones could you perform better in?
Do you know which retailers are helping to advance your category’s sales and which are in decline?
Do you know which search terms consumers are using on competitive sites that lead to purchases?
Do you know how to improve your internal search strategy on retail sites organically and through paid sponsorships?
For Retailers For Brands
Questions to ask of your Internal StrategyKnow The Answers Before Moving On
Advancing Alongside Amazon - US | 4
PART ONE
Overcoming the Amazon AdvantageWhat can competing retailers do to close the gap?
PART TWO
Filling the Category GapsWhich categories can competing retailers differentiate themselves in?
PART THREE
Maximizing Search StrategyHow can brands improve conversions on Amazon through search?
What’s InsideINTRODUCTION
PART ONE
Overcoming the Amazon AdvantageWhat can competing retailers do to close the gap?
Advancing Alongside Amazon - US | 6
Share of Online Transactions, Top 50 US Retailers12 months ending June 2019
Quantify Amazon’s AdvantageIt’s no secret that Amazon is America’s largest online retailer, but just how big of a delta exists between the rest of the market?
In the 12 months ending June 2019, Amazon generated 44% of all online transactions, which is 5x more than the next closest
retailer. Amazon’s advantage can be attributed to their longevity in e-commerce as well as a strong Prime customer base.
While many retailers have offered competitive 2-day shipping, a membership base of over 100 million U.S. consumers is tough
to beat online alone.
COMPETITIVE BENCHMARKING
Amazon Apple Target Kohl’sWalmart WayfairHome Depot
Lowe’sBest Buy Macy’s
44%
9%5% 4% 3% 3% 3% 2% 2% 2%
Amazon has 5x more
purchases than the next
competitor, Walmart.
Advancing Alongside Amazon - US | 7
Amazon Customer Overlap with Retailer Customer Base 21 weeks ending 7/20/19
Target Amazon’s cross-shoppersAlthough Amazon has a strong customer base, it isn’t
stopping consumers from shopping beyond Amazon.
For example, out of 41M Amazon shoppers, more
than 1.9M also shopped at Walmart. Although a
smaller audience overlap at 817K, Amazon’s customer base is 3.2x more likely to shop at Home Depot than the average online shopper.
AUDIENCE OVERLAP
Walmart
Home Depot
Target
Kohl’s
Costco
1.9M
817K
782K
582K
446K
Retailers like Home Depot can target
Amazon customers by honing in on what
they’re searching for to develop a strong
conquest campaign.
Brands can leverage this information
to determine which retail partners to
establish new relationships with and which
they should engage with further.
Leverage search
to target Amazon
customers that
are more likely to
shop at your store.
Advancing Alongside Amazon - US | 8
Pinpoint differences in customer baseAside from targeting Amazon’s customers, key shopping demographics that Amazon lacks affinity with can also be a
big opportunity. For example, consumers 25-34 years old are 22% more likely to shop at Target. This is the largest
segment of shoppers in the country, and a clear gap in Amazon’s demographic composition.
Another competitor, Costco, has a higher share of customers in major Midwestern and Southern cities compared to
Amazon.
AUDIENCE PROFILING
Retailers like Target and Costco should tailor
campaigns to meet the preferences of key
demographics that Amazon under-indexes on.
Brands can use this information to determine
retail partners that can help engage with key
demographics they want to target.
25-34 35-44
16.5%19.4%
20.7%
23.8%
Share of Customers by Age Share of Customers by DMA
Amazon Target Amazon Costco
Engage with key demographics that
Amazon under indexes on to differentiate.
HoustonChicago
3.6%
3.1%
Dallas-Fort Worth
2.9%
2.4%
Atlanta
2.6%2.3% 2.0%
1.7%
PART TWO
Filling the Category GapsWhich categories can competing retailers differentiate themselves in?
Advancing Alongside Amazon - US | 10
Identify category opportunitiesAlthough Automotive and Beauty & Health are trending well, not all categories are growing on Amazon year-
over-year. Even though the company launched as an online book-seller, Q2 sales of books declined -11% YoY.
Declining categories, like Food & Grocery’s -13% dip, are more obvious opportunities for retailers to compete on.
However, fast-rising categories, like Home, Garden & Tools, can still show promise. Leveraging search and product
optimization tactics will allow brands and retailers to boost sales outside of Amazon.
CATEGORY GROWTH
Amazon Category Purchases (M) & YoY GrowthQ2 2019 vs Q2 2018
Home, Garden &
Tools
Electronics, Computers
& Office
Sports & Outdoors
Clothing, Shoes & Jewelry
Books & Audible
Automotive & Industrial
Beauty & Health
Food & Grocery
Toys, Kids & Baby
Movies, Music & Games
+7%
+1%
+5% +15% +10%
+10%
-11%
-5% -13% -10%
Fast rising categories can still
be opportunities for retailers
to compete with Amazon.
100
75
50
25
0
Advancing Alongside Amazon - US | 11
Tailor promotions to consumer searchCookie purchases on Amazon declined -31% from Q2 2018 to Q2 2019, which contributed to Food & Grocery’s
dip. Comparing internal cookie searches on competing retail sites can help retailers and brands improve their
promotional strategy.
Based on the top internal searches that contain “cookies,” Target shoppers are seeking Oreo and Pepperidge Farm,
while Kroger customers are searching for Keebler and Kroger’s brand.
INTERNAL SEARCH
Retailers can tailor promotions to align with
customer preferences based on internal
searches across competitors.
Brands like Oreo and Keebler can use this
information as leverage when partnering
with Target and Kroger on promotions.
Top Internal Searches Containing “Cookies” - Q2 2019
“quest cookies”
“keto cookies”
“lactation cookies”
“oreo cookies”
“pepperidgefarm cookies”
“oreos cookies”
“keebler cookies”
“chocolate chip cookies”
“kroger cookies”
Advancing Alongside Amazon - US | 12
Determine sub-category differentiatorsDespite Amazon’s strength in Home, Garden & Tools, sub-categories like AC units are still areas of opportunity for
others. As web searches for “ac unit” grew 3.4x in the 8 weeks ending 7/27/19, Home Depot received 2x more search traffic than Amazon.
Home Depot also received 5 million page views in the category, compared to 3.4 million on Amazon. Brands like LG
that perform well on Home Depot may consider exclusive deals or Home Depot may decide to stock more Honeywell
and Koldfront products based on Amazon performance.
PRODUCT TRACKER
Retailers can use this intel to negotiate
exclusive deals with strong brand partners.
They can also identify new brands to stock or
existing ones to expand upon.
Brands that sell well on multiple retailers,
like Frigidaire, can leverage this information
to optimize their retailer mix.
30%
20%
10%
0%LG Honeywell Costway KoldfrontFrigidaireGE
Brands with Greater Share on Home Depot
Air Conditioners Category - Page View Share - June 2019
Brands with Greater Share on Amazon
Amazon
Home Depot
Expand category presence by identifying
brands with greater share on Amazon
How can brands improve conversions on Amazon through search?
PART THREE
Maximizing Search Strategy
Advancing Alongside Amazon - US | 14
Boost conversions through sponsored adsAlthough Claritin is a leading allergy medicine, the brand is losing share on Amazon to generic brands, like Good
Sense. Aside from optimizing price, Claritin can leverage search to boost conversions on Amazon.
20% of “Claritin” searches result in a Good Sense page view. Meanwhile, Good Sense receives 53% of their views
from “loratadine” and Claritin gets none. Claritin can adjust their paid search strategy to defend against Good
Sense or conquest more of their views.
SEARCH INSIGHTS
Retailers can use this information to
understand how consumers shop within
a category to adjust their internal search
optimization.
Brands can increase spend on their
branded search terms or bid on terms
that competitors benefit from to boost
conversions.
Paid vs. Organic Share of Page Views by Search Term - June 2019
“claritin”Paid: 6%Organic: 94%Page Views: 13,335
Paid: 0 Organic: 100%Page Views: 3,466
Paid: 67%Organic: 33%Page Views: 4,180Page Views: 0
Search Term Claritin Good Sense
“loratadine”
Paid
Organic
Advancing Alongside Amazon - US | 15
Share of Page Views from Search on AmazonApril 2019
Optimize product descriptions for organic growthSearch can also be leveraged to organically increase
page views and grow brand visibility.
One of the top searched terms for mascara in April
was “mascara for green eyes”. Maybelline products received 19% of traffic for that term, which is a third
of what Almay received. However, both brands
are receiving traffic from purple mascaras, which
complement green eyes.
SEARCH OPTIMIZATION
Retailers can use these search insights to
determine which brands or products are popular
among consumers on competing retail sites.
Brands like Maybelline can organically improve
traffic by including top keywords (i.e. “for
green eyes”) in product names.
Search Term:
mascara for green eyes|All
Almay received
54% share from
trending term
“mascara for
green eyes”.
Almay Intense i-Color Volumizing Mascara, Black Plum
Almay One Coat Thickening Waterproof Mascara, Black
Almay Intense i-Color Volumizing Mascara, Sapphire
Maybelline
received only
19% from the
same term.
Maybelline Great Lash Washable Mascara, Blackest Black Volumizing
Maybelline Snapscara Washable Mascara, Ultra Violet, 0.34 Fluid Ounce
Advancing Alongside Amazon - US | 16
• Identify demographics that Amazon underserves or overlaps with your customers
• Develop conquest campaigns to capture target audiences from Amazon
• Track changes in consumer preferences from internal searches and page views
• Leverage brand partnerships to tailor promotions and adjust product assortment
• Pinpoint which attributes consumers are searching for within specific categories
• Optimize product assortment based on consumer preferences in each category
• Identify which retailers engage best with new or existing audiences
• Expand upon or create new retail partnerships that can reach these segments
• Identify your brand share by category within retaiers
• Determine level of engagement with each retail partner to optimize mix
• Establish which search terms competitors benefit from or which are being underutilized
• Develop paid and organic search strategies from these findings
How can you overcome Amazon’s advantage?
What can you do within key categories to grow market share?
How can you improve conversions through search?
For Retailers For Brands
Key TakeawaysSUMMARY
Advancing Alongside Amazon - US | 17
Hitwise is a global digital intelligence provider that helps brands and agencies, like Walmart, Goldman
Sachs, Condé Nast, and Group M, segment and reach online audiences. As pioneers in data science for
over 20 years, we deliver long-lasting improvements to our clients’ marketing and sales performance.
Powered by leading data transformation and modeling technologies, Hitwise data is audience-first,
actionable, globally-compliant, and unmatched in terms of granularity. This allows us to provide a
complete understanding into how consumers behave online - from initial search to final purchase, at any
moment in time, across any device.
DiscoverConsumer
Insights
LiftCampaign
Performance
MeasureCompetit ive
Benchmarking
OptimizeSearch & Channel
Optimization
Want more tactics for
defeating Amazon? will help uncover digital insights into yourstrategic audience segments.
CONTACT US HERE
APPENDIX
Page 2: Hitwise, US. Top Amazon stats from 12 months ending 6/30/19 or
Prime Day (July 15-16, 2019). Holiday Season is Oct-Dec 2018.
Page 6: Hitwise, US. Share of Top 50 retailers online transactions, 12
months ending 6/30/19.
Page 7: Hitwise, US. Customer overlap of Amazon shoppers, 21 weeks
ending 7/20/19.
Page 8: Hitwise, US. Share of customers by age and DMA, 21 weeks ending
7/20/19.
Page 10: Hitwise Amazon Retail Intelligence, US. Category size & growth,
Q2 2018 vs. Q2 2019.
Page 11: Hitwise, US. Internal searches containing “cookies” on Amazon,
Target & Kroger, Q2 2019.
Page 12: Hitwise, US. Brand share of page views within AC category on
Home Depot vs. Amazon, June 2019.
Page 14: Hitwise Amazon Search Intelligence, US. Paid vs. organic share of
page views for top search terms in Allergy Medicine category on Amazon,
June 2019.
Page 15: Hitwise Amazon Search Intelligence, US. Share of page views
from “mascara for green eyes” on Amazon, April 2019.
