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360pi reports Amazon's power due to a trio of categories

Report finds electronics as an example of a mature e-commerce category, auto parts as a nascent but growing e-commerce category, and patio and garden goods as a category that falls in-between.

April 27, 2015

360pi issued a new report last week analyzing pricing dynamics of categories. The report examines Amazon's goals to be perceived as the price leader in all categories and looks at three distinct segments as examples of Amazon's competitive strategy. It focuses on electronics as an example of a healthhy e-commerce category, auto parts as a burgeoning but growing e-commerce category, and patio and garden goods as a category that falls in-between.

"It is evident that Amazon's commitment to maintaining their image of the low-price leader will continue to spread into additional categories. What remains less clear is how brick and mortar retailers, specialty online pure plays, and other mass retailers will counter the drive to rock-bottom pricing," said Jenn Markey, vice president of marketing for 360pi. "We continue to see a stratification of retailers into winners and laggards. Winners know it's about delivering a unique value proposition to customers vs. price matching Amazon using such tactics as localized pricing and assortment, private label, and personalization."

Retailers in electronics category have clearly claimed their pricing strategies, but do try to "rock the boat" with short-term promotions and dynamic price changes. Compared to the garden and patio goods category, 360pi's analysis shows more pricing volatility in the electronics category. Some of the retailers dropped their average price by as much as 28% and raised it by as much as 13% in the same time period, with significant changes made every day.

The patio and garden goods category has grown into a more price transparent category, compared to auto parts. Traditionally known as the domain of brick and mortar mass merchants, this category is becoming more prominent online because the products are easier to compare and there is more assortment overlap between retailers. 360pi's analysis shows that since Amazon has been playing in this category for a longer time, they have perfected their price position on a broader category level, compared to auto parts.

The auto parts category lacks significant assortment overlaps, pointing to a relative "traditionalism" still prevalent in the online automotive market. In many cases, these retailers still retain exclusive, dedicated relationships with brands and feature mostly unique assortments. Additionally, according to 360pi and another sign that this category is just starting to grow online, some retailers price the same products at over 50% higher than Amazon. The report also shows that Amazon's price dynamism in this category hovered around 5% of assortment re-priced daily, which is significantly lower than in the other categories.