For the second consecutive quarter, Amazon reported record profits. In Q3, Amazon's earnings reached nearly $3 billion, a threshold the company may very well surpass in Q4 2018. Despite these good tidings, Amazon's stock fell in response to the most recent quarterly report. In the report, Amazon's sales projections for the holiday season were lower than expected – $66.5 billion to $72.5 billion while analysts had projected $73.8 billion – but the tech and retail juggernaut is still in an enviable position as we begin the busiest retail season of the year.

For Health & Personal Care brands, is a key retail partner.  HPC is Amazon's largest household consumables category and it continues to grow faster than most. So as the holidays rapidly approach, let's look at the state of HPC on and within the wider US retail landscape.

US retail is looking very strong at the beginning of Q4. The economy is doing well, unemployment is low and consumer confidence is at its highest in years. Amazon is of course going to reap the benefits of the positivity shared by both consumers and analysts, but so are its competitors. Though Amazon's sales are at an all-time high, its market capitalization is on the decline. Amazon's projections for Q4 amount to a growth of between 10 and 20 percent, nothing to scoff for most of Amazon's competitors, but something that amounts to a slowdown by Amazon's standards.

Major brick-and-mortar retail chains like Walmart, CVS and Walgreens are successfully pushing back against Amazon by prioritizing ecommerce, improving operating efficiencies and innovating in last mile fulfillment. By integrating their online and physical presence, these retailers have been able to offer a flexible omnichannel shopping experience. This is a competitive advantage over Amazon, primarily an ecommerce pure-player, and has allowed them to regain some of their market capitalization.

It's important to note that in competing with Amazon, these retailers have taken a page out of Amazon's playbook. Despite the company's nominal growth slowdown, Amazon remains the leading ecommerce innovator and the retailer to watch for the latest consumer trends.


Nutrition & Wellness's largest Health & Personal Care category (by a wide margin), Nutrition & Wellness ($645M est. Q3 sales) also saw the highest growth (60% YoY). Sales of Vitamins & Dietary Supplements in particular grew by over 75%. Growth was also driven in part by an increased demand for Herbal/Mineral Supplements and increased number of 3P sellers in the category

Consumers have become very selective about what they put in their bodies and the endless selection offered by the digital shelf allows them to seek out products that suit their needs exactly. As a result, brands need to communicate their features to shoppers as quickly as possible. Third-party brand Sports Research held the #1 bestseller position in Q3 with their Collagen Peptides Powder, which includes the following in the product title: "Grass-Fed, Certified Paleo Friendly, Non-Gmo and Gluten Free".  Most of the brand's direct competitors are using a similar strategy, so finding out exactly what consumers are typing into the search box – trends that can change very rapidly – and targeting those keywords can have a major impact on traffic and sales.

Sports Research also represents another key trend in Nutrition and Wellness. This 3P seller earned an estimated $4.5 million in Q3 2018 from its bestselling product alone, an example of the wider success that third parties are having on Amazon. First parties still control a majority share, led by Garden of Life, but 3P sales grew by 50% YoY due in part to their tendency to respond more rapidly to evolving consumer tastes and target niche interests and values.


Health Care

The impressive growth in Nutrition & Wellness can be at least partly attributed to consumers reaching a new level of comfort with buying health-related items online. Ecommerce has been around a long time, but it has been a slow process to get to the point where consumers are comfortable buying just about anything online – Amazon is still having a hard time selling fresh foods – and Health Care is one of those areas in which shoppers did not fully trust ecommerce.

That seems to be changing. In Q3, Health Care ($220M est. Q3 sales) was the second-fasted growing HPC category (42% YoY), with strong growth in store-dominated subcategories Feminine Care and Adult Incontinence. Also influencing this category was an early start to the ragweed allergy season, contributed to an 80% growth in Eye Care sales and a strong quarter for 3P sellers in the Pain Relief and Allergy subcategories. The relatively small size of Health Care, the #4 category overall, coupled with this strong growth indicates that this category offers plenty of untapped potential for HPC brands.

Baby Care

The #2 category overall is one that has been fiercely fought over for years. Baby Care ($400M est. Q3 sales) is a mature category in ecommerce and consequently experienced the lowest overall growth (16% YoY). While there are many consumer segments that Amazon struggled to convert during the retailer's high-growth phase, new parents were not one of them. The ability to buy diapers and other Baby Care items online and have them shipped to their door has always been an irresistible alternative to the challenge of navigating a shopping trip with a baby in tow.

Not surprisingly, major diaper brands Pampers and Huggies dominate the category. The fastest growing Baby Care brand was Waterwipes, an Irish brand that specializes in chemical-free wipes and grew by 43% YoY in Q3. Kandoo also stands out by producing a flushable baby wipe, a feature most major brands lack, and increased their sales by 36% during Q3.

Baby Care is also one of the targeted categories in Amazon's private label strategy. Almost exactly one year ago Amazon launched Mama Bear diapers, a brand which began slow but continues to grow, increasing by about 50% between Q2 and Q3. 2018 YTD sales are estimated at almost $7 million, representing a market share of nearly 2% and ranking them as the #5 diaper brand. While this is an impressive position to be in after only one year on the market, it is nowhere near the size of Pampers and Huggies which together control over 80% of diaper sales on

Household Consumables

Amazon's HPC private brand strategy does not stop at diapers, however.  In Household Consumables ($350 est. Q3 sales), which grew nearly twice as fast as Baby Care (30% YoY), Amazon is estimated to have earned over $8M in YTD sales through private brands, with Presto! being a key driver of these sales. Both Presto! and Mama Bear offer laundry detergents and together drove Amazon's private label sales in the laundry category to double during Q3.

Presto! also competes in the Paper Products subcategory, the largest subcategory led by major brands like Bounty, Charmin and Cottonelle, the latter of which saw a nearly 5 times increase in sales during Prime Day 2018. But the fastest growing subcategory, Household Cleaners which grew by 45% YoY, is being targeted by Amazon's latest brand expansion into HPC: Solimo.

Solimo has recently rolled out a new line of Health & Personal Care items from trash bags and razors to supplements and tampons. This is the kind of move that HPC brands should certainly perk up their ears for: Amazon has identified an opportunity to either capture an unmet consumer demand or to offer a better value for a household staple.

Even as CVS and Walgreens regain some of their market capitalization, Amazon is still on track to have its biggest Q4 yet. The ecommerce giant continues to be a first mover when it comes to retail technologies and the latest consumer trends. is also the first stop on the path to purchase for a majority of US consumers. As Amazon continues to achieve record profits quarter after quarter and growth in the Health & Personal Care category outpaces the competition, HPC brands can't afford to look away.


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