The popularity of the Instant Pot pressure cooker in Amazon is driving the growth of the e-commerce giant's sales in the field of household goods. Does this mean that the Bad Bath & Beyond and other old house brands have begun their doom.
Amazon's ability to cater to consumer purchasing habits has given it a huge competitive advantage in the home.
One Click Retail found that sales of U.S. household products soared by 20% to nearly US$8 billion in 2017 driven by sales of kitchen appliances such as Instant Pot. In 2017, Instant Pot’s sales have nearly doubled, pushing Amazon’s household products sales almost exclusively.
What did Amazon get from the success of Instant Pot?
The core customer base of Instant Pot is the “millennial generation”. Consumers in this age range from 20 to 35 years old, and a large part of them have already married. They have invested heavily in homes. One Click Retail pointed out that the success of Instant Pot reveals some of the shopping needs of millennial consumers: these consumers are willing to invest in home, and busy work makes them more willing to buy time-cost-effective products, and Instant Pot is Such a "combination of convenience and economy."
Instant Pot is not only a bestseller on Amazon Prime Day, but also one of Christmas's most popular products. According to Amazon, "In the final season of 2017, customers will be able to make more than 9 million bowls of chili sauce at a time by using the Instant Pot pressure cooker."
A report by e-commerce analyst company One Click Retail showed that the sale of household goods to Amazon is second only to electronic products. This means that its ability to extract and analyze data from its 300 million active users is "unparalleled," and that any retailer who wants to rely on this market segment to revive its own destiny should be extremely concerned .
It is estimated that half to two-thirds of households in the United States have Amazon Prime membership accounts.
AI technology and data analysis enabled Amazon to gain insights into consumer buying history and preferences, and to provide consumers with products with excellent infrastructure, which has placed half of the U.S. population on its logistics. The center is within 20 miles. Such a strong overall strength is not what many physical retailers have, and they should also be worried.
Amazon is building a "new home" for itself
Amazon recently launched the Amazon Home service, which focuses on providing consumers with large furniture and appliances, and allows consumers to shop based on product category or room type.
From small home appliances, vacuum cleaners to air conditioners and bedding, Amazon has foresaw the needs of consumers.
Amazon also formed an air transport team and plans to establish a new distribution center in Kentucky. In addition, Amazon also launched its own trucking service to compete with UPS and FedEx for the final mile delivery.
Amazon's development in household products has caused Bed Bath & Beyond, a household goods retailer, to be threatened. Throughout 2017, Amazon's household goods sales were similar to Bed Bath & Beyond's sales in the first three quarters of 2017. If the current trend continues, Amazon will soon surpass Bed Bath & Beyond.
Bed Bath & Beyond is not the only retailer to rely on household products for sales. J.C. Penney also said that it is trying to increase customer spending through household goods, toys and other products. To this end, J.C. Penney added an appliance showroom to about 600 stores and added mattresses to 500 stores.
In addition, Sears Holdings is also opening an independent store selling home appliances and mattresses.
One Click Retail said that Amazon’s focus on household products “is by no means a temporary rise. This is a major strategic move for them, designed to meet the changing needs of their core audience.” These were once required by Bed Bath & Beyond. Stores and specialized retailers such as JC Penney and Sears. Amazon is using its unique capabilities to steal customers from these competitors and potentially destroy these competitors during its development.