Online retail is a rapidly growing market for all types of goods, including baby goods. Amazon appears to have a firm grip within the market. However, retail leaders Wal-Mart and Target are competing against the e-retailer.
Internet Retailer recently reported that the baby products category has the highest penetration of sales online, and 75% of those sales occur on Amazon.com, Walmart.com and Target.com. Consumer research firm TABS Analytics showed in a new study that e-commerce accounts for 20% of all sales within the baby products market, which is currently at $30 billion per year. This outstrips the 2% penetration for all consumer packaged goods. The study also shows that 18%-24% of baby products purchases occur online. That means that Amazon/Diapers.com represents an impressive 43% of the baby products market online. Wal-Mart’s represents 23%, Target’s is at 18% and all other e-commerce players equated to roughly 12% of the market.
“Online sales of baby products are out-competing all other segments of consumer packaged goods that we have surveyed over the last three years,” said TABS Analytics CEO Kurt Jetta in the article. “Brick-and-mortar retailers with e-commerce aspirations should treat baby product sales as the frontline of their battle for online success.” This means that this market has a high potential to generate revenue for all three retailers, and it may be worth doing with it takes to capture more of it, even with offering more Same-Day Delivery to attract consumers. With baby goods having the types of sales that it has, one reason Amazon probably has an edge in sales is because of its’ vast same-day delivery program.
Indeed, Amazon has a huge footprint in this market online. The article mentioned that 75% of the $6 billion in baby products purchased online occur on e-commerce sites run by Amazon.com. This amount falls within a $30 billion total in the market from all offline and online purchases. Also, Amazon with it’s subsidiary Diapers.com, comprises 7.3%-10.6% of all baby products purchases in the US. Walmart.com accounts for 3.7%-5.8% of purchases and Target.com, 3.3%-4.3%.
The question is will Wal-Mart and Target Baby go deeper into same-day delivery? Baby goods are just one of those lines of products that are needed on a frequent basis. More and more consumers have become comfortable with shopping online as well. Wal-Mart has same-day delivery in some major US cities and Target works with Google Express providing same-day delivery.
It would make sense for both retailers to jump aboard with Amazon and expand the service. Amazon announced earlier this year that it added 11 more major US cities to its’ current free same-day delivery program. The new additional US cities include Sacramento, Stockton, Charlotte, Cincinnati, Fresno, Louisville, Raleigh, Richmond, Tucson, Milwaukee, and Nashville. Now, the e-retailer leader has 27 total markets where they offer same-day delivery program.
When companies like Amazon, Wal-Mart and Target seek after implementing same-day delivery, they partner with a Same-Day Courier like 1-800 Courier to create an effective delivery solution. The Seattle Courier has a national footprint, enabling it to be a delivery provider on a large scale and can expand from city to city.
Reference: 4.20.16, www.internetretailer.com, Stefany Zaroban, Amazon, Target and Wal-Mart battle for online sales of baby goods
