Amazon Is Losing Market Share Across Several Segments to Competitors [A Numbers Game]

You’ve probably read about how Amazon has put a stop to its paid acquisition. We’ve  the topic extensively already over the past few weeks, and yet, what we’ve recently discovered sheds some light on the magnitude of this move.

The insights we revealed from our recent analysis of Amazon’s visits and conversion rates across several leading markets suggest a new, and disruptive, normal is materializing.

Amazon still dominates retail, and with a margin, but the Coronavirus is serving as a catalyst for growth for other retail and eCommerce sites such as Walmart, Best Buy, and Staples who seek to steal market share away from the Big that keeps getting Bigger.

Eh? Tectonic Shifts in the Shopping Landscape?

In Canada, while ‘s market share of visits and conversions declined between February and March, 4.9% and 7.3%, respectively, the share of conversions for  – Amazon’s biggest competitor in the country – increased by 62% (from 3.2% to 5.2%). Other notable gainers that Amazon should be watching out for are , a popular brick-and-clicks retailer, which grew from 0.8% to 2.2% (+275%) and , whose share of conversions rose from 3.4% to 4.5% (+32%).

The graph below shows the marketplace visits vs. conversions for desktop traffic in Canada for February and March 2020.

A Grooming Opportunity for Higher CVR (ConVersion Rate)

One of the few positives of COVID-19 is the effect it has had on animal rescue efforts and adoptions. Americans are bringing home more pets for companionship during a time of quarantine and that presents retailers with an opportunity to capture more revenue from pet-care grooming, food, and accessories. Despite Amazon’s share of traffic in the U.S. increasing by 1.3% between February and March, its percentage of converted visits dropped 1.2%.

Amazon has a best-in-class conversion rate across pet-care suppliers, converting 3x its fair amount of traffic. In comparison, petco.com and  draw in around 15% of traffic share but only 4% to 5% of converted visits, suggesting their sites are considered an afterthought or a destination for price comparisons.

The graph below depicts pet care visits vs. conversions for desktop in the U.S. for February and March 2020.

Or, maybe not. With Amazon’s paid search declining substantially between February and March, Petco proved to be effective at grabbing online shoppers with an opposite strategy.

Petco’s share of paid search visits increased only 3.9%, however, its share of paid search conversions more than doubled between February and March.

The graph below demonstrates total visits and converted visits to petco.com on desktop in the U.S. for February and March 2020.

Tesco, Sainsbury Lead Consumables During a COVID-19 Surge

The United Kingdom is Amazon’s  in terms of annual net sales. One of the increasingly popular shopping categories in which Amazon is losing ground in the U.K. is Consumables, which refers to consumer packaged goods, groceries, health, and beauty products.

‘s share of consumables traffic decreased between February and March by 2.9%, mainly due to a rise in traffic across competitors, such as Morrisons. Despite its consumables traffic share decreasing 2.4%,  – the largest player in the set – converted 4.1% more traffic (1 in 3 total conversions). Similarly,  increased its share of converted visits from 1.75% in February to 2.13% in March (21% MoM growth).

The graph below represents the total market share for consumables converted visits on desktop in the U.K. for February and March 2020.

The Bottom Line

Amazon’s main competitors within top markets are leveraging paid search to draw more traffic, and more importantly, convert traffic. Players such as Canadian Tire, U.S.-based Petco, and U.K.'s Tesco could emerge from the Coronavirus pandemic with a more substantial online presence, thanks to the changing business environment. We expect these trends to intensify in the coming months.

This post is co-authored by Daniel Schneider and Jamie Drayton.