Amazon Online Share: Lame or Dominating the Game?

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While Walmart still holds the top spot as the world’s highest grossing retail establishment, Amazon holds the top U.S. online retailer position, falling just behind the Chinese firm Alibaba as the world’s largest online seller. An annual report from Statista.com shows that Amazon was able to amass almost $136 billion in net revenue during 2016 (an increase of almost 29% over 2015)– and Amazon’s reach continues to grow.

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Amazon and Amazon Marketplace’s power is far reaching but doesn’t dominate all sectors of durable goods’ online sales. While some of these aforementioned sectors do have low rates of internet sales to begin with, recent data offers some hope for other online merchants when it comes to several categories of both large and small consumer durables.

Product Categories Where Amazon Has Dominant Online Market Share

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Amazon is active in nearly every U.S. online commerce category and accounts for almost 40 percent of online durable goods sales, according to TraQline, The Stevenson Company’s survey of over 600 thousand consumers per year. TraQline also found that the retail giant enjoys a substantial lead in quite a few categories. Listed below with Amazon’s share of the online market, these product categories include:

    • Safety & Security: 59% (down significantly from 2015)
      (Smoke detectors, carbon monoxide detectors, and fire extinguishers)
    • Personal Comfort: 58% (up significantly from 2015)
      (Air filters, humidifiers, dehumidifiers, portable fans, portable heaters, and air cleaners)
    • Portable Audio: 56% (up significantly from 2015)
      (Stereo headphones, portable MP3 players, radios, boom boxes and CD players)
    • Clothing Care: 56% (up directionally from 2015)
      (Sewing machines and clothes irons)
    • Water Products: 54% (up significantly from 2015)
      (Water filters, replacement filters, water heaters, water softeners, and water dispensers)
    • Home Audio: 54% (up significantly 2015)
      (Clock radios, home theater systems, home speakers, shelf stereo systems, separate CD players and receivers)
    • Communication: 53% (up directionally from 2015)
      (Cordless telephones and GPS receivers)

 

 

While capturing less than half of all online purchases, Amazon still enjoys an impressively large percentage of internet sales in the following categories:

  • Kitchen Electronics: 49% (up from 2015)
  • Cameras & Camcorders: 47% (up directionally from 2015)
  • Hand Tools: 45% (up directionally from 2015)
  • Video Gaming Systems: 45% (up directionally from 2015)
  • Computing: 43% (up significantly from 2015)

Exceptions to Amazon’s Dominance

As mentioned previously, there are also several categories where Amazon not only lags behind, but falls far short, with an online market share as low as 7 percent. The most notable of these, with Amazon’s online market share, are:

  • Tires: 8% (TireRack.com leads the category with 19%)
  • Major Appliances: 8% (Sears.com leads the category with 21%)
  • Flooring: 7% (HomeDepot.com leads the category with 35%)
  • Kitchen Cabinets & Countertops: 12% (Kitchen Specialty leads the category with 18%)

Analysis

Amazon positively dominates many consumer durable categories, but there are a few categories where Amazon’s lack of online market share stands out. Larger, durable goods such as appliances, and items that require installation, such as tires and flooring (note that consumables such as soap, diapers, etc. are not included in this analysis) are gaps for Amazon. For these items, consumers need to touch, feel, and compare them. The added component of professional installation for tires and flooring further complicate Amazon’s challenge in gaining share for these categories.

button - Have a question?It is important to note, however, that the categories where Amazon falls short do not have a high occurrence of online sales in the first place. Online purchases only account for 6 percent of total Tire sales and 5 percent of total sales for Flooring. Further, only a slight 3 percent of Auto Jacks & Batteries are bought online. While consumers tend to purchase more Major Appliances online than the aforementioned products, only slightly more than 1 in 10 are internet sales. So, although Amazon may not capture many of the online sales for these categories, the retail giant isn’t necessarily missing out on large profit opportunities as a result.

Conclusion

For online retailers competing with Amazon, whether large or small, knowing the market share percentages is critical. Competing with the online giant in areas where it dominates the market could be disastrous. Likewise, concentrating on categories for which it falls behind in the overall market could have big payouts. In today’s fast-paced, data-driven sales environment, having and understanding the numbers are critical for success.

Editor’s Note: This article was originally published in May 2016. It has been updated to reflect 2016 TraQline Market Share data

Since 2000, TraQline has been one of the industry’s leading providers of market share and consumer behavior for brick and mortar and online sales of over 200 different consumer durables categories.  For more information or for Amazon’s (or Amazon’s competitors’) historical shares, contact TraQline at info@traqline.com.