The host just dropped the casserole and the guests are arguing politics. This dinner party is not going well! That's kind of how we felt compiling the quadrant for this Dining & Entertaining category on Amazon. With no High IQ Brands and an unprecedented concentration of brands in the Laggards quadrant, there are few bright spots here. However, we do like what we're seeing from Anchor Hocking (Oneida) and Amazon.
This BrandIQ Quadrant benchmarks brand performance by the critical disciplines of supply chain operations and marketing. Who is best able to both drive and fulfill demand on Amazon in this category? The metric that underpins marketing is Share of Voice (how often your brand appears in organic or paid search results), and for operations it's revenue leakage (how well are you able to avoid losing sales because shoppers are unable to buy your product because it's unavailable, lost buy box to 3Ps, etc.). Given Amazon's ever-increasing complexity and speed, mastering both is not simple.
Since there aren't any High IQ Brands we'll jump right into Niche Performers. Amazon and Anchor Hocking are leading the way. Anchor Hocking has the edge in overall Share of Voice (4.4% vs. 3.2%) and it's largely Anchor Hocking's organic search that's putting them a step ahead.
But as we've seen time and again, it's operational excellence that enables Amazon to elevate above other brands. This has held true in the Paper & Plastics, Coffee, Tea & Cocoa, Filing Products, and Computers & Tablets categories. In this category, Amazon has an astoundingly low 0.6% revenue loss due to availability issues. And 0% leakage due to loss of the buy box to 3Ps. Operationally, it's about as close to perfection as you can get!
For Anchor Hocking, it is losing 5.8% of revenue due to availability issues and 4.5% to the 3Ps. It's leakage is actually just high enough to push them out of the Niche Performers quadrant and into the Laggards. But there's so little good news here we need to celebrate where we can!
Nothing pains us more than the Large Leakers quadrant. With powerful marketing and weak execution it's a tough position to be in. Libbey is crushing it on the marketing side. With 13.2% share of voice they're well over 2x their nearest competitor in this category. And most of that is derived from organic share of voice, although they are a dominant spender on advertising as well, coming in at #2.
With nine brands, this Laggards quadrant is the most heavily packed we have analyzed. For overall Share of Voice the brands have a nice range from 1.2% (Arc) to 2.5% (Home Essentials). Novica is the big spender taking 4.2% paid share of voice, placing them at #1 in the whole category. But their organic Share of Voice is only 0.2% which puts them at the bottom of the category.
Revenue Leakage is where things come tumbling down for these brands. Starting at a quadrant-best 17.5% Revenue Leakage for Pyrex (Corelle) the story only gets worse, and quickly at that. All the way to Le'raze and US Acrylic who are losing almost all their revenue to loss of the buy box to 3Ps.
But having said that, many brands are actually acing it on Availability. Novica (0%), Duralex (1%), Arc (1.1%), Pyrex (2.5%), US Acrylic (5.8%) and Circleware (8.8%) are looking good on revenue loss due to availability issues. If any of these brands get their 3P issues fixed they'll migrate right on over to the Niche Performers quadrant!
Similar Amazon L3 Categories
The Paper & Plastic category on Amazon is fairly similar to the dining and entertainment one here. It's the general shape the brands form in this quadrant that makes them similar. The High IQ Brand quadrant is empty, giving this a "crescent moon" look to it. The only major difference here is the density of the Laggards quadrant, where the Dining & Entertainment category is loaded and Paper & Plastic has a more even distribution.
Example of a Healthy Amazon L3 Category
The Small Kitchen Appliances Amazon category is a good example of a healthy quadrant. It has a few top performers in the High IQ Brands quadrant, which is typical of healthy categories where there is often two to three brands. The Niche Performers category is absolutely packed, which means the brands are doing an excellent job fulfilling and holding on to the demand they generate.
And an empty Large Leakers and sparsely populated Laggards quadrant is always a good sign. These quadrants are never both completely empty, but a small handful of brands is what we're looking for here.
Our data was drawn from an automated, daily analysis of top keywords in the Amazon L3 dining and entertaining category over a one-year period. Our method focused on 1P brands and their associated SKUs. Marketing performance was determined by analyzing Share of Voice which essentially divides how many times a brand appears in search results, by the total available slots in the search results. Our system looked at both organic and paid ads for the top keywords discovered for the dining and entertaining category on Amazon. Our system focused on page 1 search results and the product page for each SKU. Each appearance of the brand in organic search and paid ad slots was given equal weighting. Revenue Leakage was determined by an algorithm that analyzes inventory availability of the SKUs on the product page and translates that into estimated revenue missed for each brand due to things like a SKU being Currently Unavailable, Inventory Encumbrance, Item Under Review, a 3P seller taking the buy box, etc.