By Nathan Rigby, VP at One Click Retail and Danny Silverman, CMO at Clavis Insight
The demand for natural products is one of today's most powerful trends. Across numerous product groups, consumers will tend to choose a product perceived as "natural" if given the option. Items labelled as "natural" or "organic" have seen the most growth in recent years in the grocery industry, both on Amazon and offline. As people consume more natural foods, they want the same for their pets, whom they consider family members. And this trend increasingly goes beyond food, encompassing cosmetics, pharmaceuticals and even diapers.
We've taken an inside look at the performance of natural products on Amazon and identified the five categories most impacted by this trend (so far) and how the top-performing first-party products have capitalized on this growing consumer preference – all in the context of Clavis Insight's 6Ps framework:
- Product: Product availability is fundamental to success. Even a brief out-of-stock period can cause an ASIN's rank to drop dramatically.
- Placement: Better placement means more shoppers see the product, increasing brand awareness and the opportunity for conversion.
- Price: It's important to compete on price, but it's more complicated than you think.
- Promotion: Promotions are a sure-fire way to increase your placement and attract more shoppers to your product page.
- Page: A successful product page requires high-quality images, A+ content, strong keywords and a lot of positive customer reviews.
- Performance: A good performance created a positive feedback loop which allows you to reach a wider audience and increase your sales.
*Rankings reflect Amazon first-party items only.
Personal Care, a broad category, is a natural match for this trend (pun intended). Last year, this category was worth an estimated $700M, 40% larger than in 2016, with a great deal of the natural product items in the category made up of individual niche items from 3P sellers. However, major first-party brands such as Thinkbaby and Burt's Bees have maintained their competitive lead in the Personal Care space by marketing to consumers motivated by natural products.
The current bestseller is Burt's Bees 100% Natural Moisturizing Lip Balm benefits from a strong Placement as the #1 Lip Care item and a YoY growth of 60%. A "Bestseller" tag appears on this item's Page, boosting visibility, but it suffers as a result of being an add-on only item, meaning that it is not profitable enough for Amazon to ship this item on its own. The high performance can thus be attributed to consumers who place large orders on Amazon rather than those who are shopping specifically for lip balm.
Top Competitor: Thinkbaby Safe Sunscreen SPF 50+
At the nexus of Personal Care and Baby Products, Thinkbaby Safe Sunscreen is a major success, earning the loyalty of Millenial parents who, concerned for their child's health, are attracted by this all-natural product's designation as the first sunscreen to pass Whole Foods Premium Care requirements. With 70% YoY growth, this item's strong Performance has earned it the Amazon's Choice label in Baby Suncreens and helped it rank as the #4 Sunscreen item overall.
The natural products trend is part of a broader consumer interest in health and well-being. Living an active lifestyle is very important to today's consumers, and we can see that reflected on Amazon in the success of the Performance Nutrition category, which earned an estimated $600M in 2017 and grew by 4% YoY.
In this category, 6 out of the 10 bestselling items were natural products, led by the Quest Nutrition Protein Bar. The most popular flavor, Chocolate Chip Cookie Dough, saw only about 15% sales growth but still accounted for nearly 2% of total category sales. This success is in part due to the item's Page, which stands out as some of the better content on Amazon with plenty of images and video and a comparison chart and well as over 13,000 customer reviews.
Top Competitor: Orgain Organic Plant Based Protein Powder, Creamy Chocolate Fudge
Quest Nutrition's top competitor grew much more rapidly in 2017: Orgain Protein Powder grew by 35% growth and ranked as the #4 bestselling Performance Nutrition item last year. This performance was helped by including "Organic" and "Plant Based" in the title in order to capitalize on the natural products trend. However, several third-party sellers have managed to offer some flavors at a lower price, likely causing 1P sales to suffer.
Being "Natural" is a major competitive advantage in the Pet Food space. All of today's leading Pet Food brands on Amazon make a point to emphasize that their products are natural and sustainably-sourced, and these products have driven 50% YoY growth leading the category to an estimated size of $750M.
The #1 ASIN targets the natural product category forcefully. The terms "Natural" and "Real Meat" appear in the title on Amazon, and both of them as well as "Sustainable" are emphasized in capital letters on the item's Page. With such a strong Placement – #1 in Dog Food, #3 in Dog Supplies and #4 in all Pet Supplies – Taste of the Wild easily maintains their lead with almost double the sales of the #2 dog food ASIN.
Top Competitor: BLUE Life Protection Formula Adult Chicken and Brown Rice Dry Dog Food
The #2 item also benefits from a strong Placement and has seen growth almost triple YoY in 2016 and 2017. Even though BLUE dog foods are all-natural, the brand hasn't capitalized on the natural products trend to the same degree as Taste of the Wild, sponsoring terms such as "dry dog food" instead of targeting the conversion-increasing terms "healthy" and "organic".
The Vitamins/Supplements category, worth an estimated $750M and growing at 45% YoY, isn't being taken over by natural products to the same degree as the other categories included here, but several all-natural items are ranking as top performers.
Doctor's Best High Absorption Magnesium grew by 50% in 2017 thanks in part to a long, extended title which includes the following: "Non-GMO, Vegan, Gluten Free, Soy Free". These specific callouts can have a major effect on conversion, but Doctor's Best also supports the item with frequent discounts on Price, placing the $15 item on sale for $14 or $12 regularly throughout the year. This has helped the item achieve its Placement as #1 in Magnesium (despite other brands sponsoring that term) and #1 in Sports Nutrition, and earned it a "Bestseller" tag.
Top Competitor: SmartyPants Kids Complete Gummy Vitamins
The top competitor, growing at a slightly higher rate of 50% YoY, also makes a specific callout to "Non-GMO", while also including "Sustainable" and specifying the exclusion of most major allergens on its Page. This item is the #1 result for the search term "kids vitamins", a great Placement for driving sales.
Snack Foods may not be as dominated by natural products as Pet Food is, but the consumer demand for more "natural" foods is certainly having an effect on this space. At the moment 4 of the top 10 Snack Foods on Amazon are labelled as natural and/or organic and most of them are outgrowing their traditional competitors.
Annie's Organic Bunny Fruit Snacks doubled their sales in 2017 due in part to their performance on Prime Day, which nearly tripled their weekly sales and generated a lift that lasted long after the event. Contributing to this was a sponsored search for the term "fruit snacks" – for which this item is the #1 search result – and the Promotion of a 20% off coupon.
Top Competitor: KIND Bars, Caramel Almond and Sea Salt
KIND Bars were another bestselling Snack Food of 2017, though growing at only half the rate of Annie's. Sales were driven by a high-quality Page, including a specific callout for "Gluten Free" in the item's title and roughly 14,000 customer reviews with an average rating of 4.5. This item ranks high in specific categories such as Nut Bar but competes poorly in broader categories such as Breakfast Food.
The 6Ps – Product, Placement, Price, Promotion, Page and Performance – are a checklist for brands. Lacking in any one of these areas signals untapped sales potential. For example, all of the leading natural products brands discussed above ensured their Product was consistently in stock, nearly all of the items listed offer a Subscribe & Save Promotion, and the most successful brands use specific key words on their Page to reach the right audience.
Today, the consumer demand for natural products is huge. Roughly 25% of all Amazon Fresh sales in 2017 were items which had the word "organic" in the title, including 8 of the top 20 bestselling Grocery items of last year. With Amazon's purchase of Whole Foods in mid-2017 – a grocery store chain which carries natural products exclusively – that number is certain to grow. By understanding the behavior of your target audience on Amazon, you can join these brands as a leader in the strong (and growing) Natural Products trend.
About One Click Retail:
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About Clavis Insight:
Clavis Insight is a global leader in online channel insights for product manufacturers, and a principal innovator at the forefront of the eCommerce analytics revolution. The company has developed a powerful framework - 6Ps eCommerce Intelligence™ - for organizing and prioritizing eCommerce analytics and actions to drive online channel success for brands. Global manufacturers use their daily eCommerce analytics and insights to drive sales in their categories online, to optimize content for brand equity enhancement, protection and product information compliance, and to deliver consistent, unified reporting on online retailer brand presence and performance.
For more information on Clavis Insight 6Ps eCommerce Intelligence™ visit www.clavisinsight.com.
