E-commerce analytics firm One Click Retail has identified five key trends driving sales at Amazon.com, pointing out factors that are impacting the home goods sector.
The company noted that Amazon generated 44% of all e-commerce sales in the United States during 2017 and 4% of the country’s total retail sales. The five key trends energizing Amazon operations:
- Millennials. Major retail trends observed throughout 2017 can be tied to the reality that more of Amazon’s core Millennial shoppers are growing up. They increasingly own homes and are raising children while buying a lot of the various products that go along with a more mature lifestyle. For example, the bulk of the estimated $5.5 billion in home and kitchen sales comes from young people, the group that shops from Amazon the most and who are investing in their homes and families.
- Gadgets and Home Automation. Amazon’s Alexa, the voice-activated personal assistant developed for the Echo smart speaker, has proven a boon to home automation. More brands are looking to smarter products to generate additional sales, which should add momentum to home automation-related sales.
- Automated Marketing. Amazon spent 2016 building its automated marketing system, then doubled down with some substantive upgrades to the system in 2017. Greater sophistication now allows brands to bid on a broader range of keywords, targeting mobile, desktop, and/or app users, and they can integrate with email marketing and vendor-powered coupons.
- Consumables and Private Brands. In the 2017 first half, Amazon consumables sales, a category that includes grocery, health & personal care, beauty and pet products, grew 35% year over year. Then Amazon acquired Whole Foods, and along with that what is now Amazon’s second-largest private brand, 365 Everyday Value, with over $10 million in estimated 2017 sales.
- China and No-Name Brands. Rooted in the electronics space, no names have been gaining across product groups. With most emerging from China, white label products represent a major opportunity for Amazon.
“Ultimately, success, for both Amazon itself and for brands that sell through the platform, comes down to knowing your audience,” said Spencer Millerberg, CEO at One Click Retail. “It’s clear that Amazon catered to the right crowd in 2017, and the brands that correctly understood who their products were for, and who they were most useful to, are the ones that had a very good year.”