Without question in the online retail market, baby goods is the product category that is soaring above all others. It currently has very impressive numbers in regards to sales, and the retailer that is capitalizing on it is no other than Amazon. Between the e-retail leader, Wal-Mart and Target, Amazon has the highest share of the market. One reason Amazon does could very well have to do with free Same-Day Delivery in several major US cities. The question remains will Target and Wal-Mart go deeper into last-mile deliveries to compete with Amazon.
The baby products category has the highest penetration of sales online, and 75% of those sales occur on Amazon.com, Walmart.com and Target.com. Internet Retailer discussed in a recent article how consumer research firm TABS Analytics' new study showed that e-commerce accounts for 20% of all sales in the baby products market, which totals $30 billion per year. This outstrips the 2% penetration for all other consumer packaged goods. Consumers that shop for baby goods online need them frequently, and the value-added service of convenience that same-day delivery brings could increase sales. This is why it is going to be interesting to see if Wal-Mart and Target beef up their same-day services as Amazon has done.
“Online sales of baby products are out-competing all other segments of consumer packaged goods that we have surveyed over the last three years,” said TABS Analytics CEO Kurt Jetta in the article. “Brick-and-mortar retailers with e-commerce aspirations should treat baby product sales as the frontline of their battle for online success.” Online retail is forecasted to reach $500 billion by 2018, which means baby goods will be among the online products that grows even more than it has. Wal-Mart and Target could potentially develop more same-day delivery throughout the US to compete with Amazon. One thing we can be certain of, Amazon sees the value in the trending service option and will not be slowing down same-day delivery for no one.
The numbers show indeed that Amazon has a larger percentage of the baby goods market online. The study also shows that 18%-24% of baby products purchases occur online. That means that Amazon/Diapers.com represents 43% of the baby products market online. Wal-Mart’s represents 23% and Target's is at 18%. All other e-commerce players roughly coves the remaining 12% of the market. The article also mentioned that Amazon with it's subsidiary Diapers.com, comprises 7.3%-10.6% of all baby products purchases nationwide. Walmart.com accounts for 3.7%-5.8% of purchases and Target.com represents 3.3%-4.3%.
Based on the TABS survey of 2,000 consumers between the ages of 18-75, some additional findings in the article stated:
- Households with children up to 5 years old are the heaviest buyers, accounting for 60%-70% of all purchases online and offline.
- Households with young children purchase 8.5 baby product types per year, compared to 1.6 for all other buyers.
- Roughly 40% of baby products are purchased by consumers who don’t have any young children in their households, which represents 71% of all households. The bulk of these purchases likely come from relatives or friends giving gifts.
Wal-Mart and Target already are engaged in some level of same-day delivery. A Same-Day Courier like A-1 Express can partner with the retailers to create a same-day delivery program for hundreds of stores. The San Francisco Courier is a nationwide courier and has the expertise it takes to consistently fulfill orders for baby goods online.
Reference: 4.20.16, www.internetretailer.com, Stefany Zaroban, Amazon, Target and Wal-Mart battle for online sales of baby goods