CPG E-Commerce Sales Soared 42% Last Year, Fueled by Amazon

Report by 1010data Finds Laundry, Toothpaste Growing Fastest

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That e-commerce inflection point packaged-goods marketers have sought for decades may finally have arrived. CPG e-commerce sales soared 42% last year, well ahead of overall growth in e-commerce and driven heavily by Amazon subscription sales, which more than tripled, according to data analytics firm 1010data.

Credit: Amazon

The fastest-growing CPG e-commerce category was laundry detergent, with sales up 85% last year, according to 1010data, which found Procter & Gamble Co.'s Tide leads with a 48% share. That's ahead of Tide's roughly 38% share in all forms of laundry detergent offline last year, per IRI data for the 52 weeks ended Dec. 27.

Likewise, smaller green-positioned detergent brands such as Seventh Generation, Method, Charlie's Soap and SC Johnson's Mrs. Meyer's also did much better online than offline. For example, Seventh Generation's 5.7% e-commerce share per 1010data is nearly 10 times its 0.6% IRI share and makes it the No. 3 U.S. detergent brand online, just behind P&G's Gain.

E-commerce Market Shares for Laundry Detergent

Toothpaste was the second-fastest-growing CPG category online last year, up 75%, according to 1010data. P&G's Crest came in first, and Colgate came in second, the same as offline, But just like in detergents, smaller "natural" brands fared far better online than offline.

Crest's 23.9% share per 1010data was more than 13 points lower than its IRI offline share, and Colgate's 15.5% share online was less than half its 33.3% offline share. Fortunately for Colgate-Palmolive Co., it also owns Tom's of Maine, whose 10.4% online share per 1010data is five times bigger than its 2% offline share, per IRI.

E-commerce Market Shares for Toothpaste

While IRI gets its data from store scanners, 1010data collects online "clickstream" data from 10 million panelists in the U.S. to track sales, with the analysis adjusted to reflect U.S. Census demographics, said Tim Wilson, VP-online insights. The firm was acquired last year by Advance Publications.

The firm's Facts for Ecom Insights covers 50 broad CPG categories as well as other sectors and found e-commerce overall grew 30% last year in the U.S. That's faster than some other market trackers such as ComScore have found, largely because 1010data doesn't track bigger, more established segments such as travel, automotive and eBay. The 1010data service covers the top 100 mass online retailers, which it estimates account for 95% of e-commerce sales in categories it tracks.

E-commerce still only accounts for only around 2% of grocery sales, per a recent Morgan Stanley report. But the report also projected accelerating growth this year, based on a survey that found 26% of U.S. consumers expect to buy groceries online this year, more than triple the 8% who said they did so last year.

Even if it's only 2% of CPG sales, e-commerce growth at the pace 1010data found would add nearly a percentage point to overall annual CPG industry sales, which IRI said grew only 0.6% offline last year. IRI in a recent report projected e-commerce will account for half of industry growth in years ahead.

In some categories, e-commerce is already a big business: 1010data estimates annual sales of the top two CPG categories -- online pet food sales and facial moisturizers -- at $760 million and $450 million respectively.

Amazon's Subscribe & Save alone accounted for 20% of CPG e-commerce growth last year, Mr. Wilson said. Subscription growth has also been key to making Chewy.com "one of the dominant players for pet products online," he said. "I would expect all players to start looking hard at subscription opportunities."

While the limitless shelf space of e-commerce helped small brands, he believes Amazon Dash, the buttons for placement around the home that let people automatically order products they're running out of, helped some big labels, particularly Tide.

"It's not a coincidence," he said, "that one of the top-selling Amazon Dash buttons is for Tide, and Tide has a massive market share online."

For that matter, while Pampers is the top selling CPG brand in e-commerce, according to 1010data, Kimberly-Clark Corp.'s Huggies closed some of the gap last year, growing 80% in part due to participation in Dash.

The fastest-growing big CPG e-commerce brand -- meaning sales over $20 million -- last year was Unilever's Dove, with sales up 136%, followed by Colgate's Hill's Pet Nutrition and Nestle's Purina, up 126% and 123% respectively, according to 1010Data. None of those brands were in the Dash program.

Top 10 CPG Categories YOY Ecom Growth U.S.
Laundry Detergent
85%
Toothpaste
75%
Health Snack Bars
74%
Deodorant
71%
Adult Nutrition
68%
Baby Wipes
68%
Protein Powder
66%
Bottled Water
63%
Mouthwash
63%
Baby Diapers
61%
Beauty Primer
60%
Source: 1010Data
Charts by Chen Wu

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