Which CPG brands are winning on Amazon?

The best sellers on Amazon aren’t always the brands you would expect. While the market-leading brands are becoming more effective on the site, it’s often new and emerging brands that sell on Amazon that are now benefiting from early-mover advantage.

Amazon is so big that it cannot now be ignored as a marketplace for brands. Its sales are growing one to two times faster than ecommerce overall, while it drove 60% of total US online sales growth in 2015, capturing $100 billion in U.S. ecommerce sales.

Stats from Profitero show the 100 best-selling products at Amazon in several key categories for the first six months of 2016, with a focus on CPG (consumer packaged goods).

amazon best seller

This is interesting, with Amazon’s recent focus on areas like online grocery shopping. Amazon Fresh is well established in the US, and has made moves in the UK recently.

According to Alex McCord of Compass Marketing:

“We’re now seeing the advent of ecommerce native companies: companies that come onto Amazon and other e-retailers and who are able to gain traction through getting a ton of recent reviews.

They know how to work the Amazon algorithm and then launch products that, from the perspective of a brand in the brick-and-mortar world, have as low as zero market share. But in the world of unbranded search on Amazon and other retailers, they’re enormous players.”

Profitero found that in Grocery and Beauty, the best-selling brand on Amazon is often not the brand that dominates that category offline.

For example, healthy snack brand KIND tops the grocery best seller ranking at Amazon, while in Beauty, Pure Body Naturals is the winning brand with an average of 5,465 customer reviews. ArtNaturals takes the #3 spot with 5,512 reviews.

best selling brans

The importance of unbranded search on Amazon

Search at Amazon is the dominant pathway to product selection.

According to a survey conducted by BloomReach last year, more shoppers go to Amazon before Google when they know what they’re looking for, and either want to find it or research it.

New and emerging brands  are winning with Amazon because:

  1. Shoppers are searching for specific attributes (e.g. natural, gluten-free), and can find these products more easily on Amazon.
  2. Emerging brands are more aggressively optimizing their product content as they know this can gve them an advantage in Amazon searches.
  3. These brands are also often not widely distributed in brick-and-mortar stores, so shoppers have been trained to look for them at Amazon.

The importance of consumer reviews

Some of the most successful products have loads of reviews, and positive overall scores. For example, San Francisco Bay Coffee was the second best-selling grocery brand at Amazon between Jan-May 2016 with a staggering 23,696 reviews on average.

This is further evidence of the importance of ‘social proof’.

Melissa Menchaca of InstaNatural (a beauty brand that launched exclusively on Amazon in 2013) explains why reviews matter:

“Because we’re so Amazon driven, social proof for us relates to reviews. More specifically product reviews from our customers. The reason why that is so important is because that is how we drive as a business.

We’re very lean, we’re nimble, we’re fast-acting and this is what really sets us apart from other big name brands out there in the world. We’re able to gauge consumer interest about products and get that product to market faster than our P&G competitors.”

In the battle of the beauty brands, who’s winning on Amazon?

The study looked at the individual products that make up the top 100 best sellers for the Beauty category at Amazon. The analysis reveals that traditional beauty brands are well positioned.

beauty brands

Procter & Gamble (P&G) was the leading beauty manufacturer at Amazon with seven best-selling brands appearing in the top 100 best sellers list (Oral B, Gillette, Crest, Braun, Gillette Venus, Oral-B Power and Olay), while Johnson & Johnson accounted for only four brands (Aveeno, Rogaine, Neutrogena and Nizoral).

P&G products receive, on average, more than double the number of reviews that Johnson and Johnson products receive  (2,240 vs 1,132) further evidence that reviews do matter.

With half of all predicted growth in CPG sales between now and 2018 expected to come from ecommerce, and with Amazon driving the majority of that growth, an Amazon strategy is essential for CPG brands.

To see the full study from Profitero and category reports for Amazon US and UK, aim here

Head over to ClickZ Intelligence for more details on our UK Grocery Retail Sector Report. Watch out for our US version coming soon…

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