By Nathan Rigby, VP Sales and Marketing at One Click Retail

Household consumables make up a huge proportion of Amazon’s sales volume. Last year, consumables – including Health & Personal Care, Beauty, Grocery and Pets – generated more than £600 million in estimated sales in the UK, making it one of the company’s largest product groups. Now into the second quarter of 2018, these product groups continue to experience strong growth on Amazon.co.uk, outpacing brick-and-mortar retailers and most ecommerce players alike.

Last week, we took a close look at Amazon’s performance in the Grocery space in Q1 of this year and discovered that, while YoY growth rates have begun to fall (from 56% to 33%), volume growth is at an all-time high. At the same time, Amazon is doubling down on some key investments in the space (see our Grocery Q1 Update for details).

Both of these things are true in Beauty and Personal Care as well. Health & Personal Care (HPC) is Amazon’s largest product group within the consumables space, and Beauty is the fastest-growing. Like Grocery, both groups are experiencing volume growth at an all-time high, and Amazon is in no way content to rest on its laurels, strategically adapting and reinvesting in the consumables space as the ecommerce giant’s market share grows.

Beauty, Health & Personal Care in the UK: Amazon Q1 2018 Update

Health & Personal Care: Amazon Largest Consumables Category

In 2016, Amazon teamed up with one of London’s oldest pharmacies in order to offer same-day delivery of health and personal care products to Prime members throughout the city. John Bell & Croyden, one of Time Out’s 100 best shops in London, stocks a wide rank of health and wellbeing, spa, skin care and household consumables, which are available via Prime Now for free two-hour delivery within the city of London.

This paralleled a deal with Morrisons the same year, which allowed Amazon to offer same-day grocery delivery to Prime members. These brick-and-mortar partnerships are part of Amazon’s ongoing plan to control to online consumables market, including fresh foods and drugstore products, but at this point these categories remain relatively small.

Beauty, Health & Personal Care in the UK: Amazon Q1 2018 Update

 

By volume Health & Personal Care has consistently been led by the Nutrition & Food category, which experienced sales estimated at $30M million in Q1 2018, nearly 40% of the HPC sales total. The largest portion of this category was Sports Nutritional Powders (42% of the category) followed by Vitamins & Mineral Supplements (30%).

However, Household Consumables is on track to overtake Nutrition & Food if growth rates continue on the current trend. The largest category grew by only 20% YoY while Household Consumables grew by 72%, making it the fastest-growing category. Sales drivers include Laundry, Household Cleaners, and Paper Products, with Andrex Tissue Paper ranking as the bestselling HPC item during the last quarter.

Beauty, Health & Personal Care in the UK: Amazon Q1 2018 Update

 

The #2 HPC item in the last quarter came was WaterWipes Sensitive Baby Wipes. This item faces direct competition from an Amazon private label: Mama Bear baby wipes, which are usually available at a lower price. Mama Bear is currently exclusively for Prime members – and WaterWipes is currently outselling Mama Bear by a very wide margin – but Amazon recently expanded the brand with a line of diapers in the US, so further expansion seems likely. Amazon’s investments in private brands can put pressure on first party sellers to lower their costs in order to compete more aggressively on price, which could result in slimmer profit margins, so this is a potential challenge brands need to prepare for.

Beauty: Consumers are Spending More on High-End Products

In 2017, we began to see a significant shift in the Beauty market: growth moved away from mass market consumables in favor of higher end beauty products. This remains true in 2018 – while the total Beauty product group grew by 51% during the first quarter, Prestige Skin Care nearly doubled in size while other prestige categories also outgrew the mass market equivalents.

Beauty, Health & Personal Care in the UK: Amazon Q1 2018 Update

Skin Care remains the top priority of Amazon customers in the UK. Mass Skin Care continues to drive the most sales volume in this category, led by bestselling items from ViolaSkin and Riemann and growing by 71% compared to Q1 2017.

The leading Skin Care item – and the bestselling Beauty item on Amazon.co.uk in Q1 2018 – is an example of a brand leveraging their page to drive sales. In the last quarter, ViolaSkin’s Premium Retinol Face Serum was the bestselling Beauty products. The first thing you may notice is the very long product title, which reads:

“PREMIUM Retinol Face Serum with Hyaluronic Acid & Vitamin E, Anti Aging Retinol Serum for Wrinkles, Fine Lines & Sensitive Skin – Retinol Serum Treatment for Acne, Hydrate & Brighten your look! 100% Satisfaction”

By packing this 34-word title with key words, ViolaSkin has cast a wide net to ensure that this product ranks in the results for many different search terms. As a third party seller, this brand does not have access to A+ content but makes up for it by including several highly detailed and illustrative product images as well as long and detailed, point-form product descriptions on their product pages.

In fact, at the time of writing another item from ViolaSkin, a Vitamin C Serum, is ranking as the #1 Beauty item on Amazon.com. This product’s 51-word title is even longer than previous bestseller, which ranks as #3 at the time of writing. Both these items help to drive up each other’s sales thanks to a promotion which offers a 10% discount for consumer who buy two or more items from ViolaSkin’s range. However, both products don’t actually include the brand name in the title, which could further improve the brand’s search performance.

Beauty, Health & Personal Care in the UK: Amazon Q1 2018 Update

 

 

The consumer emphasis on Skin Care is both large and growing, but the biggest trend today is that consumers are willing to spend more for high-end Beauty products – and increasingly so. Mass Beauty products drive the most sales volume, but as the flow of consumers from in-store shopping to Amazon continues to grow, more of them are investing more money in higher quality products tailored to their specific desires.

As the fastest growing space in Amazon consumables, Luxury Beauty is certainly a big opportunity for brands – but there are opportunities everyone you look. The ecommerce giant’s share of the consumables market is growing across the board, outpacing brick-and-mortar retailers and most ecommerce competitors. Each of the top 10 categories in Beauty and Personal Care are growing by at least 18% year over year with some having nearly doubled in size since Q1 2017. Amazon is quickly becoming one of the most important retail channels in Beauty and Personal Care – and the brands that learn how to market on Amazon will have the most to gain.

One Click Retail is the industry’s most accurate source of sales data for the world’s top eCommerce marketplaces. Using a combination of website indexing, machine learning and proprietary software, OCR estimates weekly online sales figures with market leading accuracy in order to deliver the best insights, analytics and strategies to their brand manufacturer clients. To catch a glimpse of how OCR gives brands critical edge on online platforms with our unique data and expertise, subscribe to our weekly eCommerce insights blog, and follow us on Twitter and LinkedIn.

If you are a brand manufacturer who would like to learn more about how you stack up to the competition—or would like to see your market share and category growth insights—email us at info@oneclickretail.com for a free capabilities demo.