It’s the one category where Walmart still owns Amazon. Exclusive PYMNTS data analysis shows that health and beauty has been tracking at a high rate of growth for Amazon, but the everyday nature of Walmart gives it the edge.
With Amazon’s Prime Day wrapped up and its counterprogramming from Walmart and other retailers still in progress, the U.S. consumer’s whole paycheck is being picked clean this week, and will continue to be under pressure as the holiday season proceeds. As it does, the Whole Paycheck Tracker is looking beyond the holiday. Because it’s in 2021 when the digital-first economy will continue to prove itself. One of the categories pointing to that future is health and beauty.
Amazon has already stated its intention to get deeper into the category through its Halo device. The marketplace powerhouse entered the wearables market in August with a wristband device that tracks various health performance indicators, allows for third-party integrations and also puts Amazon deeper into the subscriptions and services arena. Halo will directly compete with Apple Watch as well as Fitbit and other wearables on the market. The move also puts Amazon back into the device market.
While the health and beauty category has its share of expensive devices (Halo is mid-range at $64.99), the lion’s share of the health and beauty category include the basic consumer packaged goods items like shampoo, toothpaste and cosmetics. None of these products, or the whole category for that matter, have ever achieved much market share online. But with the onset of COVID-19, that is changing rapidly and dramatically. According to new data from PriceSpider, the health and beauty category easily beat out all others for growth during the pandemic, with 173.5 percent year-over-year online growth for Q3.
That’s good news for Amazon, and it comes in one of the rare categories where it can use a boost. The short version: Walmart is beating out Amazon in health and beauty. However, with a growth rate like 173 percent, it will be interesting to see how Amazon fares in this category as it continues to take close to a majority of the U.S. eCommerce business.
For now, it’s Walmart’s game to lose. PYMNTS’ exclusive data analysis developed for the most recent quarterly Whole Paycheck Tracker goes back to 2016, when the mass-market giant took $36.7 billion in the category online and in-store. That started a steady rise to $42.5 billion in 2019 for 5.4 percent of total consumer spending, just a shade under the percentage measured in 2016. Amazon started from way behind, getting $8.3 billion in 2016 but then spiking to $19.4 billion in 2019. That $19.4 billion was good for 2.5 percent of the total consumer spend.
The game got a bit closer in Q2 2020, when Amazon posted $6.5 billion, up from $4.4 billion in Q2 2019. It also posted a full percentage point gain from 2.4 to 3.5 percent of total spend. Walmart was roughly double the volume,