Are we, as an industry, talking about Amazon too much?
I saw this post on LinkedIn the other day from Kroger and I was curious, is 300K a lot, it sounds like it. But it is? The quick answer is no, not even close. Walgreens has 420K, but Target has 1.3M, Walmart has 3.2M and Amazon has over 19M followers on LinkedIn! Wait… what!?
So welcome to this week’s rabbit hole. We are calling it the ‘Share of Noise’. We will be exploring the relative ‘noise’ in the marketplace about certain retailers as compared to how ‘big’ they are (i.e. sales volume) to see if the noise is justified.
So we decided upon 5 retailers and dove deep into the numbers. Any guesses which retailers the different plot points are above? (the answer is at the end of the article – I challenge you not to jump there now)
First, we will focus on and look at the X-Axis (Share of Sales) in the 2 by 2 Matrix above. According to Kantar total US retail sales in 2020 was $4.04 trillion. Below are the sales of our sample of retailers which represents $872.8B or ~20%.
2020 Sales | |
Walmart | $408.9B |
Amazon | $155.5B |
Kroger | $122.3B |
Walgreens | $104.6B |
Target | $ 81.5B |
Next, looking at the Y-Axis (Share of Noise) on the two by two matrix. We utilized 3 metrics to determine “noise”.
- RetailWit Articles (proxy for media coverage)
- Social “Followers” (proxy for interest)
- Search (proxy for total content)
- On RetailWit our algorithms tag and type every single article. Currently we have ~11,000 articles in our database. Of those ~1,100 contain the Amazon tag so 10% of our content features Amazon.
*Apparently we are part of the problem.
Note: The rest of the 'analysis' (term used lightly) is done exclusively based on the sum total of our 5 focus retailers.
2. We utilized social media ‘followers’ as a proxy for the general interest in the different retailers. We used a combination of LinkedIn, Twitter, and Facebook. These findings are not overly surprising that both Amazon and Target are ‘overachievers’ relative to their sales.
3. Lastly, we looked at Google Search results. There were some extreme results here. Amazon had 3.7T results, you read that right: Trillion! Walmart had 348M. Target had a strong showing here as well with over 1.7T. Poor Kroger and Walgreens were barely a blip.
Now, bringing it all together, it is pretty obvious who is ‘outkicking their coverage’ on Noise over Sales. The clear ‘winner’ here is Amazon but a very strong showing from Target as well.
…. and finally bringing back the 2 by 2 Matrix. Did you guess right?
Final Thoughts: These results are not accidental, as seen below Amazon employs an army of PR agents and continuously floods the market with Amazon News. Once again, it shows that Amazon is playing chess while the others are playing checkers. But, honestly, it may not be so much that Amazon is outkicking their coverage as it is the other retailers, particularly Walmart, are under achieving it — except Target, they seem to have really ‘earned’ their Noise vs. bought it… the question is how and why. Our POV is Target has a very strong brand and great shopping experience that gives the industry and ‘guests’ something to talk about.
Thanks again for reading, we appreciate hearing your thoughts or comments below or, as always, we would love to hear from you; email us at [email protected].
Now onto Last week’s Top Stories:
- An opinion piece, from MarketDive on the cookieless future, and how privacy isn’t the end-game.
- Dollar Stores Dominate 2021 Retail Openings – Coresight Research says they will account for 45% (yes, you read that right) of all retail store openings this year.
- Amazon shows continued crack down on counterfeits in Brand Protection report. Highlights include 2MM counterfeit products caught and destroyed. That’s a fun job.
- Mattel gives Barbie and other toys a green makeover with a new recycling program.
- Sprout reports Q1 results (-9.4% ID sales). Bright spots for growth in the following month include smaller format stores, logistics, and targeting / digital capabilities.
- Ex-Barry Callebaut boss Antoine de Saint-Affrique tapped to become Danone CEO. Also, they are selling their 9.8% stake in China Mengniu Dairy Company.
- Blue Apron’s profitability struggles continue in Q1 results.
- Target’s Good & Gather’s Extends into Plant-Based with 30+ new products.
- Poshmark and ThredUp took some stock hits as investors are unsure of where to invest, but CEOs are encouraged by recent trends and think business will pick up throughout the year.
- All anyone can talk about these days is going back to restaurants like it used to be, but there might be a labor shortage of teens this summer as they look to other industries for summer work.
- Ahold Delhaize releases Q1 ID sales, which were just ok, showing a 1.7% growth. Is this a sign of things to come for other grocery retailers?
- Top DTC brands are making the move into B&M, deep dive from Kaleigh Moore at Shopify – including one brand that makes the unique candles pictured at the top.
- Food inflation is coming and manufacturers, CPGs and Retailers are going to have to make some tough decisions in the coming months. Read more in this article from Just Food.
- And lastly, Walmart is making more moves in the apparel channel as they acquire Zeekit – a virtual fitting room company. Another push from the biggest retailer to stake a bigger claim in clothing, this time with a focus on a virtual solution – the big question will be how inventory and fulfillment are handled to make it truly seamless for the end user.
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