The vitamins category on Amazon has a unique distribution of brands across every quadrant, with a tight cluster of six brands demonstrating strong operational execution. In fact, this is the first category we've analyzed that has multiple brands in every quadrant. Having said that, we still see a wide disparity both in terms of how well brands are marketing themselves and fulfilling that demand.
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.
High IQ Brands
Garden of Life and SmartyPants barely make it into the High IQ Brands quadrant. Their respective 3.8% and 3.4% shares of voice are not going to set any records (in any category), but it makes the difference in this particular quadrant. However, as we break it down further, the story gets interesting. SmartyPants is the top advertiser in the category, capturing 8.8% paid share of voice, whereas Garden of Life has just 1.2%. Through it's advertising investment, SmartyPants is beating out top marketers Nature's Bounty and Arm & Hammer in overall share of voice. In fact, the ratio of Garden of Life's Paid-to-Organic share of voice is a whopping 5x. That's more than any of the hundreds of brands we've analyzed, except for Lego (6x) in the Building Sets category, and Amazon itself (10x) in the Computer & Tablets category.
Looking at Revenue Leakage we see SmartyPants and Garden of Life have have the exact same loss of revenue due to availability issues. Both are losing 1.24%. That's an excellent metric. Garden of Life is also losing only 0.2% of revenue to 3Ps taking the buy box. A top performer for sure. SmartyPants is doing just fine as well by losing only 3%. For reference, top performers in our quadrant should be losing less than 10% of revenue (combined) due to 3Ps and availability issues.
Pfizer, P&G, Amazon and Bayer are battling it out in the Niche Performers quadrant. Bayer currently has the upper hand with 3% share of voice, driven almost evenly by organic and paid. We recently hosted a webinar with Bayer's VP of e-Commerce on how they run their Amazon e-commerce business. This is a highly competitive category and P&G, Amazon and Pfizer are right behind it. P&G is Bayer's closest challenger when it comes to paid share of voice, scoring 3.7% to Bayer's 4%. The others are spending one-half that amount or less. However, on the organic side things are much tighter with organic share of voice only spanning from 1.3% (P&G) to Bayer (2.7%).
Things really loosen up on the revenue leakage side. The span here broadens from 0.4% (Amazon) to 7.8% (Pfizer) loss of revenue. In between we have Bayer (3.7%) and P&G (2.1%). These are all strong performances, though Pfizer is starting to get concerning. It's their availability issues that are harming them. We'll see how they trend over time.
Ah, the Large Leakers. This is where your marketing budget goes to die, lol. Nature's Bounty and Arm & Hammer are clearly the top overall marketers in the category, securing 6.9% and 5.6% share of voice, respectively. Both brands have moderate levels of advertising spend at around 3.3% paid share of voice, and healthy organic share of voice at 8.4% for Nature's Bounty, and 6.5% for Arm & Hammer.
Queue the other shoe dropping. Nature's Bounty is losing 31% of revenue to leakage, due to both availability issues and loss of the buy box to 3Ps. That's pretty heavy, but we've certainly seen worse. Arm & Hammer is not in too bad a shape, losing 16.2% of revenue, primarily to availability issues. They are doing a good job holding on to the buy box.
NOW Foods, Sports Research and GNC are pinned to the Y-axis. That means they are losing significant revenue to 3Ps and/or availability issues. Brands in this position are leaking more than 20% of revenue. These three brands are losing 42%, 100% and 99%, respectively. For Sports Research it's entirely a 3P issue, which leads us to believe (hope) it may be part of their business model to sell through 3Ps? For GNC they're losing 63% due to availability issues and 36% to 3Ps. And NOW is seeing about an even mix - losing about 20% apiece to availability and 3Ps.
This is never a happy quadrant, and this category is no exception.
Example of another Healthy Amazon L3 Category
Although the vitamins category is looking pretty healthy, the Cat Litter & Housebreaking Amazon category is a good one to benchmark against. It has the characteristics we like to see in a quadrant with an empty Large Leakers quadrant, two to three in High IQ Brands, and the remaining brands distributed among Niche Performers and Laggards, but without any brands pinned against the Y-axis. We even see Arm & Hammer (Church & Dwight) in this category as well, though in a more favorable position.
Our data was drawn from an automated, daily analysis of top keywords in the Amazon L3 Vitamins 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 Vitamins 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.