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 $64 billion in net revenue across North America during 2015 – and Amazon’s reach continues to grow.
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
Amazon is active in nearly every U.S. online commerce category and accounts for as much as 40 percent of online durable goods sales, according to TraQline, The Stevenson Company’s survey of over 500 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: 65%
(Smoke detectors, carbon monoxide detectors, and fire extinguishers) - Portable Audio: 55%
(Stereo headphones, portable MP3 players, radios, boom boxes and CD players) - Clothing Care: 54%
(Sewing machines and clothes irons) - Communication: 52%
(Cordless telephones and GPS receivers) - Personal Comfort: 51%
(Air filters, humidifiers, dehumidifiers, portable fans, portable heaters, and air cleaners) - Home Audio: 50%
(Clock radios, home theater systems, home speakers, shelf stereo systems, separate CD players and receivers) - Water Products: 50%
(Water filters, replacement filters, water heaters, water softeners, and water dispensers)
While capturing less than half of all online purchases, Amazon still enjoys an impressively large percentage of internet sales in the following categories:
- Power Tools & Accessories: 46%
- Kitchen Electronics: 46%
- Cameras & Camcorders: 46%
- Video Gaming Systems: 44%
- Hand Tools: 43%
- Computing: 40%
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 5 percent. The most notable of these, with Amazon’s online market share, are:
- Tires: 5% (TireRack.com leads the category with 22%)
- Major Appliances: 6% (Sears.com leads the category with 24%)
- Flooring: 7% (HomeDepot.com leads the category with 35%)
- Automotive Jacks & Batteries: 17% (AdvanceAutoParts.com leads the category with 24%)
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.
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 5 percent of total Tire sales and 4 percent of total sales for Flooring. Further, only a slight 2 percent of Auto Jacks & Batteries are bought online. While consumers tend to purchase more Major Appliances online than the aforementioned products, only 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.
