As Amazon experiments relentlessly with new ways to push people into its Prime program, we analyze the key trends from our Amazon FastMovers over the past six months to find out if Amazon is optimizing its Prime-eligible items amidst growing competition from Walmart, Jet.com and Target.
Amazon keeps making news.
The Dash button that lets you re-order household staples with the touch of a (literal) button. The one-hour Prime Now delivery service in select cities. And the latest partnership with Jetblue to bring Prime Instant Video to the sky.
Yet Amazon’s competition continues to imitate and innovate: recent reports reveal Walmart launching its own Prime-like service for $50 per year, just as the beta launch of Jet.com attempts to peel members from Amazon’s Prime service. Other retailers have begun to play the subscription game: Target offers its own subscription discount service, and Sam’s Club has an offering with no discounts but free shipping.
As Amazon experiments relentlessly with new ways to push people into Prime and to increase Prime purchase occasions, is the company making more of its best-selling products eligible for Prime? Are best sellers participating in Subscribe & Save and Prime Pantry more now than six months ago?
To find out, I examined trends from Profitero’s FastMovers reports, in which we monitor and analyze best sellers in 12 Amazon categories daily. I looked at data from November 2014 to April 2015.
A few key trends emerged:
1) Prime eligibility remains important across most categories’ best sellers—60+% of best sellers are eligible, and more in many categories;
2) But Prime-eligibility for best-selling products does not appear to be increasing across categories and is decreasing in several, which might actually make the Prime-eligible designation a more prominent differentiator between products;
3) Beauty brands should take note of the increasing share of Subscribe & Save products among best sellers;
4) Prime Pantry items over-index on the Grocery & Gourmet Food FastMovers 100, and these trends need to be watched closely as the program matures;
Let’s dive into the details.
Prime Profitability: Amazon Might Be Optimizing Its Prime-Eligible Items
Although Amazon is expanding its Prime-member benefits, it’s not clear that best sellers across categories are becoming more Prime-eligible over time.
Dog Food is one of the few categories with a clear positive trend in the number of best sellers eligible for Prime: its numbers grew gradually from 89% in November 2014 to 98% in April 2015.
Candy & Chocolate (-25%), Toys & Games (-17%), Health & Personal Care (-15%), and Clothing (-11%) each saw a downward trend in Prime-eligibility among best sellers.
Two factors could underline the decline:
1) Anecdotal reports suggest Amazon might be optimizing its assortment to focus on item profitability in some categories, with impacts to some best-selling Prime-eligible products;
2) For other reasons, more non-Prime items could be winning in these categories despite their lack of eligibility.
Interestingly, these trends could actually increase the value of the program for brands and sellers, as Prime-eligibility becomes a bigger differentiator between top products.
Beauty Best Sellers Enter the Subscribe & Save Fold
Few high-level categories studied are eligible for Subscribe & Save, which offers shoppers savings for subscribing to regular replenishment of consumable items. And for most eligible categories, the numbers have changed little since November 2014.
Beauty best sellers eligible for Subscribe & Save, however, increased from 25% S&S-eligible in November 2014 to 38% in April 2015—including 5 of the top 10 items on Profitero’s Amazon FastMovers 100 list.
Those best-selling S&S-eligible Beauty products included 2 razor blade refills, toothpaste, and an electric toothbrush head refill. Regular, repeat-purchase products like these are perfect candidates for the S&S program.
Source: Profitero Amazon FastMovers 100 rankings, April 2015
Prime Pantry Products Continue to Over-Index on the Grocery Best Sellers List
Variable numbers of Grocery & Gourmet Food FastMovers products have been eligible for Prime Pantry since November 2014—from 7% in December 2014 to 22% in April 2015.
Given Pantry’s limited assortment (~5,000 products), 22% of best sellers is more than the program’s fair share. Even though it’s not yet essential for grocery brands to enter the program, it continues to have outsized influence on the best sellers lists.
Other Factors to Consider
Program eligibility is not the only factor influencing sales at Amazon. The relative importance of product reviews is category-dependent: reviews are extremely important in Electronics, for example. And excellent product content can both influence search results and drive conversion.