Coronavirus Disruption: How Amazon Is Losing Market Share to Competitors

You’ve probably read about how Amazon has put a stop to its paid acquisition. We’ve covered the topic extensively already over the past few weeks; 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 which seek to steal market share away from the Big that keeps getting Bigger.

Eh? Tectonic Shifts in the Shopping Landscape?

In Canada, while amazon.ca’s market share of visits and conversions declined between February and March, 4.9% and 7.3%, respectively, the share of conversions for walmart.ca – 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 canadiantire.ca, a popular brick-and-click retailer, which grew from 0.8% to 2.2% (+275%), and costco.ca, whose share of conversions rose from 3.4% to 4.5% (+32%).

A Grooming Opportunity for Higher CVR

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 US increasing by 1.3% between February and March, its percentage of converted visits dropped by 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 petsmart.com 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.

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 by only 3.9%, however, its share of paid search conversions more than doubled between February and March.

Tesco, Sainsbury Lead Consumables During a COVID-19 Surge

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

Amazon.co.uk’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 by 2.4%, tesco.com – the largest player in the set – converted 4.1% more traffic (1 in 3 total conversions). Similarly, aldi.co.uk increased its share of converted visits from 1.75% in February to 2.13% in March (21% MoM growth).

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, US-based Petco, and Britain’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 with Similarweb’s Lead Financial Services & eCommerce Consultant, Jamie Drayton.

by Daniel Schneider

Director, Content Marketing

Daniel brings over 10 years of content marketing experience, specializing in both B2B and B2C audiences. He thrives at managing delivery of content projects, consistently developing concepts that drive impact.