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Into the Digital Aisle: Which Brands Are Leading the Baby Formula eCommerce Category and Why?

In the continually shifting trends of Online Grocery & Gourmet Food, category leadership can be difficult to achieve–and nearly impossible to retain. Yet some brands are capable of successfully navigating the constant change. Our friends at Reviate asked ‘How?’ and ‘Are there any patterns?’. As they dove into the recent performance of ‘Baby Formula’, one of the top subcategories of the ‘Baby Foods’ category within online Grocery & Gourmet Food, they analyzed the entire landscape of top-performing SKUs. What they found was enlightening. Here are some insights that can help brands understand the ever-changing landscape and grow cross-channel share.

Insight #1

Similac (Abbott Laboratories) leads the pack with 25.6% of the top-performing SKUs, 28.6% of the unit volume, and 45.4% of the revenue.

Source: Reviate.com brand share of Baby Formula, top-performing ASINs within the last 30 days.

Insight #2

The shape of high-volume price points for Baby Formula is unique, and spikes at price ranges such as $24 to $31, $3 to $10, and $31 to $38. Category leaders such as Similac, Enfamil, and Pedialyte have a portfolio of SKUs that effectively cover these major high-volume price points.

 

Source: Reviate.com unit sales of top-selling Baby Formula on amazon.com during the last 30 days.

Insight #3

The Baby Formula category is fragmented enough that the category leadership can change quickly. We see the following companies driving the most efficient marketing campaigns:

Efficiency Leaderboard

  1. Nature’s One
  2. Earth’s Best
  3. Enfamil
  4. Similac
  5. Pedialyte
  6. Nutramigen
  7. Kabrita
  8. Happy Baby
  9. Enfagrow
  10. Gelmix

As we dive into the performance of each company we see that several of the brands are highly efficient in their ability to drive more than the category average sales, revenue and reviews per SKU, as you can see, below.

 

 

Source: Reviate.com efficiencies of top-selling Baby Formula SKUs on amazon.com during the last 30 days.

 

Insight #4

The Baby Formula category is currently functioning as a DIVERSITY category (not a COMMODITY category) in which multiple price points are supported by customers looking for variety, innovation and a blend of features. Brands that try to control lower price points risk losing margin unnecessarily. The below chart helps us understand the price-brand strategy of top-selling companies.

Source: Reviate.com price index of top-selling Baby Formula SKUs on amazon.com during the last 30 days.

 

There are three implications for these recent trends:

  1. Like geese drafting behind the lead flying goose, brands can look to Similac for tactical insights in how to successfully position a portfolio of products.
  2. Super-normal efficiencies can be gained. Look to brands like Nature’s One, Earth’s Best, and Enfamil for examples to emulate.
  3. The importance of pricing cannot be minimized. It is the key to driving high volume, as well as capturing enough margin to fuel growth. Ensure that your SKU portfolio covers the current high-volume price ranges we mentioned, above.

 

In conclusion, brands that are successful on Amazon, like Similac for the Baby Formula category, understand the importance of tactical SKU portfolio creation to capture the high-volume price points and performance efficiencies. By doing this well, this analysis shows that the difference between high-performing brands within the Baby Formula category is significant: 30x the revenue, 30x the revenue per ASIN, 4x the BSR rank, 13x the average review count, and 1x the average rating. Will your brand be one of those that performs?

More pricing insights are available at www.reviate.com, as well as a more detailed, free report on Baby Formula (and over 47,000+ other product categories).

 

All data is compiled and reported by Reviate.
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