Together, Health & Personal Care (HPC) and Beauty make up a significant majority of Amazon’s consumables market in the U.K. Last quarter, the two product groups generated an estimated £130 million in sales, an increase of roughly 40% compared to the same period in 2017. As of the end of Q2 2018, YoY growth has fallen slightly but remains strong, outpacing brick-and-mortar retailers as well as most online competitors.

During Q2 2018, both HPC and Beauty reflected some notable changes in consumer habits. Some are seasonally-influenced, such as the strong sales of summer skin care products, while others suggest a long-term shift in how people shop, such as Amazon’s growing share of the Beauty market. Amazon is clearly committed to strengthening their role in this space going forward as evidenced by the acquisition of U.S. online pharmacy Pill Pack. Let’s take a look at some of the most striking trends during Q2 2018.

AMZ Q2 Update: HPC & Beauty in the UK

 

Summer Skin Care

Mass Skin Care is the long-standing top category in the Beauty product group. The category is dominated by established leading brands Riemann and Nivea respectively, both of which continue to experience strong growth. The top-ranking items are controlled by smaller brands that also have year-round appeal: a Facial Cleansing/Anti-Aging Brush from Foreo Luna ranked as the #1 Beauty item in Q2 and the Proactiv Acne System ranked as #3.  Additionally, Prestige Skin Care continues to be one of the fastest-growing subcategories, benefiting for Amazon’s strengthening hold on the luxury beauty market.

Though the overall size and growth of Skin Care is strong year-round (experiencing 61% YoY growth), the category is highly susceptible to seasonal conditions. In Q1 2018, solar protection made up about 7% of this category; in Q2, that proportion more than doubled to 17%, with sunscreens entering some of the top product spots. A key emerging trend is the environmentally-conscious, value-driven shopping – for example, in both the U.S. and the U.K., “reef safe” is now one of the 50 most popular terms for shoppers searching for sunscreens, though it was virtually non-existent in 2017.

In the U.S. this has resulted “reef safe” products taking up the top sunscreen rankings, and shoppers on Amazon.co.uk are searching for reef safe sunscreens just as frequently. However, as of the end of Q2, none of the 100 bestselling sunscreens on Amazon.co.uk are labelled as “reef safe” or use the term anywhere in their product page content – not even Green People Organic Sun Lotion, despite carrying the Amazon’s Choice tag for the “Reef Safe Sunscreen” search term. This is a major opportunity for manufacturers – the market remains wide open, so small brands have a chance to make a big impact by marketing to this demographic and providing a product that matches their needs and their values.

AMZ Q2 Update: HPC & Beauty in the UK

 

Consumables

More and more consumers in the U.K. are discovering the convenience of getting their day-to-day basics from Amazon. In the Health & Personal Care product group, Household Consumables continues to be the fastest-growing category with 53% YoY growth, led by Andrex-brand bathroom tissue and paper towels. Amazon, recognizing the value of this category, has recently expanded their private label offerings under the Presto label to include paper towels, bathroom tissue, and facial wipes.

In nearly all HPC categories, Amazon’s sales are driven by consumables including oral care, men’s basics and paper products.  After Household Consumables, Shaving & Hair Removal is the second fastest-growing category; Amazon has a history of succeeding in men’s basics and consumable products sold in bulk, so it’s no surprise that this category is led in size and growth by men’s disposable razors.

Three brands are consistently in control of the top HPC items: WaterWipes, Oral-B and Andrex, though the order and the exact items at the top may vary. The stability and consistently of these brands proves that they have a well-developed strategy for winning on Amazon. WaterWipes has no competition in the Baby Care space; Baby Care as a whole is stagnating on Amazon.co.uk, despite the fact that Amazon has targeted this category with their Mama Bear private brand, but WaterWipes is uniquely experiencing significant growth, capturing virtually all new sales in this space.

Oral-B’s electric toothbrush sits comfortably at the top of the Oral Care category. This relatively small category is currently very active, with strong growth driven in part by the new trend of activated charcoal-based teeth whitening. These products are trending on social media and being heavily promoted by influencer marketing, which is driving traffic and sales to Amazon. There is an opportunity for Oral-B capture this emerging segment of the market or for smaller brands to use this trend to gain a foothold in the Oral Care space.

 

AMZ Q2 Update: HPC & Beauty in the UK

 

The Future of Health?

As the #2 HPC category, Household Consumables is sandwiched between two related categories: Nutrition & Food and Health Care. Nutrition & Food is twice the size of the #2 category, earning an estimated $30 million in Q2 2018, revealing Amazon’s strong penetration among health-conscious consumers. This is further evidenced by the size and growth of the Health Care category, which consists primarily of over-the-counter (OTC) drugs.

On June 28, the company announced the acquisition of Pill Pack, an online pharmacy in the U.S. specializing in ongoing and chronic prescription medications. While Pill Pack has no international presence, the acquisition sent shockwaves throughout the pharmaceutical drug retail industry, causing stock prices of global competitors, including CVS, Rite Aid and Boots, to plummet. Though the company hadn’t made a move in this industry for some time, Amazon has expressed interest in the past and this acquisition signifies the company’s intent to compete in the prescription drug market.

The growth potential in Beauty, Skin Care, Oral Care and Health on Amazon is impressive. Amazon’s growing share of consumables in the U.K. is outpacing the competition by a wide margin. The ecommerce giant continues to capture the flow of consumers away from in-store shopping and, quarter after quarter, those consumers are willing to spend more on Amazon to get higher quality specialized goods tailored to their specific needs, desires and values. Today, Amazon is among the most important retail channels in both Health & Personal Care and Beauty and a key opportunity for brands regardless of their specialty.

 

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