Two Paths to Success in Amazon’s Computer and Tablet Category

Jimit Director of ABM

January 3, 2018

There’s a complex story behind Amazon’s computer & tablet category. Unique to this quadrant is a wide split in brand performance in supply chain effectiveness, particularly among four of the larger brands (Dell, Lenovo, RCA and Apple). They are performing lights-out on 1P product availability, but losing a huge share of revenue to 3Ps. We suspect it may all be part of their strategy (for some of them at least) to allow 3Ps to fulfill the majority of demand for their ASINs. Because of this split, we introduced a “quadrant connector” to show how differently the brands perform with respect to availability and loss to 3Ps.

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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

 

Dell is living life in two different quadrants. We felt we needed to show how Dell performs if you isolate its revenue lost to 3Ps, and its product availability (the two inputs that determine Supply Chain Effectiveness). At once a “High IQ Brand” and a “Large Leaker”, Dell is losing less than 2% of revenue due to availability issues. Outstanding! But, it’s also losing almost 95% of revenue to 3Ps taking the buy box. It must be the case that Dell’s loss of the buy box is eclipsing any potential availability issues. That will require a deeper dive into the data. {{cta(‘dfbe99f1-5035-4f0f-92cf-3ee7360911df’)}} to unpack what’s going on with Dell and the other competitors.

Niche Performers

It’s a packed house in the Niche Performers quadrant, although half the brands (Lenovo, RCA, and Apple) were only placed here out of consideration for their outstanding performance on product availability. Their respective low leakage due to availability issues of 2%, 9% and 5% certainly would qualify them as Niche Performers. But their painfully high leakage to 3Ps of 67%, 91%, and 20% puts big question marks on their ability to compete for the buy box. Lifting the hood on the data, it looks like Lenovo is in a similar situation to Dell (above) with a business model that’s quite open to 3Ps. So, perhaps this is by design. {{cta(‘dfbe99f1-5035-4f0f-92cf-3ee7360911df’)}} if you’d like to see the detailed charts underlying this analysis.

So, the pure niche performers look to be Asus, Amazon and Cyberpower. In fact, you could argue Asus is the top 1P performer in the entire category! Asus ranks 4th in share of voice for both organic and paid. Perhaps they truly have found their niche. Close behind Asus in paid share of voice is Amazon which grabbed 10% share of voice, just behind the 12% from Asus. The other brands are bouncing off the share of voice bottom, although Apple put a little investment into the category with 4% paid share of voice.

Large Leakers

HP and Acer get the booby prize. With shares of voice of 29% and 15%, respectively, these two brands are quite available across organic and paid search results. Alas, HP’s losses 24% of revenue to availability issues. Ouch! And Acer’s 18% smarts as well. At least Acer only lost 8% of revenue to 3Ps. But HP lost 57%, so you can see why they’re pegged to the corner. It’s pretty rare to see two brands this deep in the Large Leakers quadrant. {{cta(‘dfbe99f1-5035-4f0f-92cf-3ee7360911df’)}} to get the details on these brands’ organic and paid share of voice and revenue leakage.

Laggards

With only 4% and 2% share of voice, respectively, Samsung and MSI are fringe competitors in this category. MSI’s 13% revenue leakage is actually not all that bad. Perhaps they can migrate to the right and join the niche performers. Samsung is losing 68% of revenue so there is a lot of work to do there. {{cta(‘dfbe99f1-5035-4f0f-92cf-3ee7360911df’)}} to see the dynamics behind every brand’s position on the quadrant.

Explore Other BrandIQ Quadrants

Methodology

Our data was drawn from an automated, daily analysis of top keywords in the Amazon computer and tablet 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 computer and tablet 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.

Jimit Director of ABM