The face skin care category on Amazon is showing a breakout by Johnson & Johnson and a close challenge from L’Oreal. Below those two is a block of nine brands with similar marketing results, but a wide range of scores on supply chain effectiveness. In fact, revenue leakage spans from less than 1% all the way up to 34%. A big variance, but looking across all categories it’s actually not all that unusual. The delta on share of voice (how often brands appear in Amazon search results) is not quite as dramatic, with the top brand at 16% and the block of nine niche players pegged between 1% and 2%. We can best categorize this as a moderately concentrated amazon category. The only blemish on this quadrant is the fact no brands made it into the High Brand quadrant. This is the first category where we’ve seen this dynamic.
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.
Johnson & Johnson is the sole resident of the Large Leakers quadrant. J&J pulls through with 15.8% share of voice – well ahead of its nearest competitor. There are only three significant advertisers in this category. J&J, L’Oreal and P&G who all have paid share of voice between 11% and 12%. While things are somewhat tight on the advertising side, nobody can touch J&J’s almost 17% organic share of voice.
However, the story breaks down a bit for J&J when we look at revenue leakage. While overall loss of revenue for J&J is only 14%, that’s enough to push them out of the High Brand IQ category. It’s their 10.7% loss due to availability issues that’s really hurting them. Trim those losses a bit and they’ll be the category champion.
Lots of laggard brands in this category! Valeant is the only one that stands out with moderate performance levels that could see it hop it’s way over to the Niche Performer quadrant. Its 11.6% revenue loss due to 3Ps and availability issues is just enough to contain them, however. And while its 2.2% share of voice is pretty low in the grand scheme of things, it’s still enough to put them ahead of seven other brands.
Galderma, Thayers, Unilever and InstaNatural are all pretty well pegged in the corner of this quadrant with low share of voice and high revenue leakage.
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Our data was drawn from an automated, daily analysis of top keywords in the Amazon face skin care 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 face skin care 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.