Amazon Search Focuses On Its Private Labels

Amazon continues to take market share, claiming more than 80% of conversions against other ecommerce sites across several product categories. The company holds the highest share with one-click commodity products like batteries and cleaning supplies, as well as men’s athletic shoes, according to a report released this week.

Higher-priced categories like kitchen and dining, however, show smaller growth. Amazon’s private-label business also lags. It holds only 7% share when excluding AmazonBasics, the company’s private-label business that overall makes up 88% of private-label sales, according to Jumpshot.

Arriving at the data, Jumpshot studied anonymous consumer actions within 500 online ecommerce sites and marketplaces during the first quarter of 2018, and analyzed visits and conversions of different brand categories across these sites.

While the data suggests that Amazon owns 61% of private-label conversions, excluding electronics -- a category in which Amazon seems to do well -- retailers like Walmart, Target and Macy’s hold 74% conversion market share. Excluding electronics, office, pets and home categories, those retailers own 93% market share for private labels. The close market share suggests brand loyalty doesn’t exist in these categories.

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But Amazon is using paid search to grow market share in its private-label business. Paid search accounted for 65% of all traffic to AmazonBasics electronics products, the company’s fastest-growing category, in the first quarter of 2018, although it only captured 56% of the top 50 keywords for the brand.

The next 950 keywords — those ranking between 51 and 1,000 — drove more traffic. In fact they drove three-quarters of all referrals for AmazonBasics electronics products.

Amazon invests heavily in the electronics category, using paid search for 74% of the traffic it gets from this long tail.

In the first quarter of 2017 only 24% of traffic to AmazonBasics came from organic search. Similar to the 2017 data, the leading search terms show Amazon generates a lot of organic traffic around the biggest keywords, but the real source of traffic seems to stay far from their biggest terms.

Deren Baker, CEO of Jumpshot, predicts that will change in the next few years when Amazon owns more than 75% of all product online searches.

Even Kleiner Perkins Venture Capitalist Mary Meeker wrote in her Internet Trends 2018 report published this week that 49% of product searches now begin with Amazon, compared with 36% that begin with search engines, and 15% that find other places and devices to begin a search.

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