Black Friday used to be the biggest shopping day, and then came Cyber Monday, but now one day has surpassed them both - Amazon Prime Day.
Sales this year were higher than both of those shopping occasions when comparing 36-hour periods, and Amazon even beat out the previous Prime Day. In addition, the company registered more new Prime members July 16 than any prior day in Amazon history, and welcomed members in Australia, Singapore, the Netherlands and Luxembourg, who were taking part for the first time.
Importantly, Amazon's online grocery sales continue to grow at a rate of 40% year-over-year as of the second quarter, and the retailer captured 18% of that product category in 2017, reported One Click Retail (July 19).
In the second quarter, coffee was worth an estimated $135 million in sales and was responsible for seven of the top 10 bestselling grocery items. Cold beverages was the only category to perform better, bringing in about $140 million in sales during the quarter.
Beverages are a big part of the success story for Amazon, and the company decided to capitalize on its private brand success this quarter with the launch of a line of coffee pods under its Solimo banner.
The retailer has a knack for being able to take the pulse of consumer trends and time new product introductions perfectly. Solimo coffee pods were almost an overnight success, and they already compete with top brands like Caza Trail, Peet's and Eight O'Clock and rank among Amazon's top 25 coffee pods, averaging about $60,000 in weekly sales.
Keep in mind that this product just launched in the second quarter, so it's technically still in its initial growth phase. The potential, then, is for it to be one of the biggest grocery brands in the U.S. by the end of 2018.
Overall, Amazon is expected to capture 49.1% of all e-commerce sales in 2018, according to research firm eMarketer. It may not seem like it if you look at the 40% year-over-year growth rate, but analysts there note food and beverage represents Amazon's biggest challenge to date, reported Minneapolis/St. Paul Business Journal (July 16).
Even Amazon must deal with its share of online grocery sales being low, compared to overall e-commerce sales, because most consumers still prefer to buy food in brick-and-mortar stores.
Despite all its success, Amazon still has work to do. But on the bright side, eMarketer believes Amazon likely has the best chance of converting in-store grocery buyers to online grocery buyers.
In The Food Institute's recent webinar "Achieving a self-sustaining business model: Top 3 trends companies need to think about post-COVID-19," Greg Wank, CPA, CGMA, partner and leader of Anchin's food and beverage group, as well as David Eben founder and...read more
Sarah writes for the weekly Food Institute Report and the daily news update, Today in Food. She also writes and edits the Food Institute’s annual publication The Food Industry Review and assists with The Demographics of Consumer Food Spending.
Sarah has more than 15 years of experience as a writer and editor, with a well-rounded knowledge of the food industry and business-to-business research content. Her background includes an editorial role at Convenience Store News magazine, and she has worked for Nielsen, the USA Today Network and Bauer Publishing.
Sarah is currently working on her MBA at Rutgers University. She can be reached at firstname.lastname@example.org to talk about anything food-related.
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