By Peter Andrews, One Click Retail
The 2018 flu season was one of the longest in recent memory. In January and February, record numbers of Americans suffered from severe congestion, fever and muscle pains. This year, the virus lasted well into April, just in time for allergy season.
These conditions contributed to a record-breaking season for over the counter (OTC) medication. And when you’re suffering from a severe cough, runny nose, and full-body exhaustion, the last thing you want to do is go to the store. For millions of bedridden consumers, the answer was obvious: Amazon.
It wasn’t always this way. Amazon’s investments in warehousing, logistics and regional same-day delivery have made it realistic to buy last-minute necessities online. OTC medication is the type of product that when you need it, you need it, so drugstores used to have a lock on the “urgency” market. But now, Amazon can fulfill orders so quickly – in two days or less just about anywhere in the US – that most consumers no longer have any reservations about buying their drugs online.
The result? In the first half (H1) of 2018, Amazon’s OTC medication sales were up 65% YoY, reaching an estimated value of $450M. Let’s take a look at the specific sales drivers and the brands that came out on top during H1 2018.
From Flu Season to Allergy Season
Decongestants were one of the major sources of growth during the first half of this year, second only to pain relief. Because of the extended flu season, the demand for symptom-reducing medications was at an all-time high. This drove sales of decongestants and cough and cold suppressants, while also being responsible for a sizable share of the sales boost experienced by the Pain Relief category.
The Cough & Cold category, including decongestions, cough syrups and vitamin C tablets, doubled in size YoY during H1 2018 to reach an estimated value of 50%. Boiron’s Oscillococcinum, which is suitable for both adults and children, captured most of the growth in Amazon’s flu season. These pellets for the treatment of “flu-like symptoms” pulled in more than 6 times the sales in H1 of this year compared to 2017.
While most of this growth in the Cough & Cold category can be traced to the flu season, it’s worth noting that as it was ending in April, allergy season was just getting started. Seasonal allergies peak in the early summer months, when pollen content in the air is at its highest. While the Allergies category consists primarily of allergy-specific medications, allergy season also drives high sales of decongestants well into the summer (products which usually fall under Cough & Cold). For instance, the SinuPulse Elite Advanced Nasal Sinus Irrigation System, is a popular and effective product for both flu- and allergy-sufferers. Products are often marketed specifically to one of these audiences, but brands that appeal to both groups on Amazon can extend their peak sales period by months.
Amazon’s convenience effect is visible in the Allergies category, with more consumers than ever shopping for all their seasonal allergy needs from the comfort of their home, driving a YoY growth of 35%. Allergies was also responsible for Amazon.com’s #1 OTC medication of H1 2018: Zyrtec Prescription-Strength Allergy Medicine Tablets with Cetirizine. This was consistent with the overall trend in the category, which saw an increase in sales for oral anti-allergy medications, which made up 4 of the 10 bestsellers during this period.
Pain Relief was the largest and the fastest-growing category in H1 2018. Total sales grew by 55% YoY to an estimated size of $60M, primarily driven by an increase in 3rd party sales which more than doubled compared to the same period in 2017.
Established 1st party Pain Relief brands like Advil have remained relatively stable on Amazon, but the shift to more 3P sales is a consequence of many consumers choosing alternative medicine over more common pain relief solutions. An organic search for “pain relief” on Amazon further confirms this trend as several top results within this category are all-natural items; for instance, the #2 item of H1 2018 (Turmeric Curcumin by BioShwartz) boasts of its pain-relief while also being 100% natural. The full title of this product is stuffed with keywords targeting this audience:
“Turmeric Curcumin with Bioperine Joint Pain Relief – Anti-Inflammatory, Antioxidant Supplement with 10mg of Black Pepper for Better Absorption. Best 100% All Natural Non-Gmo Made in USA”
Though this rapid increase in 3P sales has reduced the category share controlled by 1P sellers, Advil is still the leading Pain Relief brand on Amazon with three items in the top 10. Advil’s top two items are two different package sizes of their regular 200mg coated tablets. Interestingly, the bigger seller of the two during H1 2018 was the “travel” size, despite the fact the per-capsule price is higher ($0.10/count for travel, $0.08/count for regular), which suggests that consumers value portability over bulk cost-saving.
And this fact has not been missed by Advil. Recently, Advil discontinued their #2 product, the 300-count 200mg coated tablets, and replaced it with the Advil Home & Away Pack. This is a perfect example of a brand recognizing consumer buying preference and updating their products to better meet those preferences.
Advil’s new product includes the same 300-capsule bottle as the ASIN it replaced, but now also comes with one additional 24-count bottle and one 10-count vial, in an effort to better meet the consumer demand for portability. There are a few features we’d like to point out about the product detail page (PDP), numbered in the above screenshot.
As a brand-new ASIN, the Advil Home & Away Pack currently only has 3 customer reviews, compared to 614 for the previous item. On the old PDP, Advil has included a link to their new product right below the primary image in an effort to redirect traffic, capture sales that would otherwise be lost to 3P sellers, and hopefully drive new customer reviews. Most brands would be wise to include a new product as a variation of the previous one in order to build on the existing collection of ratings and reviews, and it’s unclear why Advil hasn’t done so with this new item.
- Private Brands
In August 2017, Amazon launched Basic Care, the retailer’s first foray into private-label OTC medications. In an aggressive move, Amazon has placed an ad for their equivalent Ibuprofen capsules in a prominent position on Advil’s PDP in order to redirect a portion of Advil’s traffic and potential sales to Amazon’s private brand. Even a brand as ubiquitous as Advil has to find ways to offer shoppers a better value proposition compared a retailer’s (usually more affordable) house brand – and packing innovation is one good strategy for doing so.
- Subscribe & Save
When a customer visits the PDP for Advil’s Home & Away Pack, Subscribe & Save is the default selected purchase method. Subscribe & Save, which offers shoppers a small discount if they sign up for regular scheduled auto-deliveries, can drive conversion and subsequently improve an item’s organic search ranking. Since Advil is the type of product most Americans like to keep stocked in their medicine cabinets year-round, this program can help ensure this new package size earns the steady sales required to achieve a category-leading rank.
Amazon’s effect on OTC medications is undeniable. The eCommerce giant’s sales grew by an impressive 65% YoY in H1 2018, a growth rate no other retailer can touch. American consumers have grown comfortable with the idea of stocking their medicine cabinets with the click of a button and have come to trust Amazon like never before, in part due to Amazon’s ability to deliver their goods faster than ever. Brands like Advil, Zyrtec and Mucinex have reaped the benefits of this growth due to their focus on Amazon as a major retail opportunity and their willingness to adapt to consumer habits and preferences. Going forward, this Amazon-first strategy is going to continue to pay dividends.
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