Amazon (AMZN) Sees First Y/Y Drop in Tot. Purchasers in Nov. Since 2012; eBay (EBAY) Remained Flat - Cowen

Cowen and Company is issuing commentary from its Cowen Consumer Tracking Survey of 2,500 U.S consumers through November FY14. The data mainly focus on Amazon (Nasdaq: AMZN) and eBay (Nasdaq: EBAY) sales.

Analyst John Blackledge commented, The Industry overall experienced favorable visit trends in Nov. ’14, driven by solid “Cyber Week” sales trends, while AMZN and EBAY fell slightly y/y, down ~0.5% and ~1.5%, respectively. Prime subs outperformed non-Prime, as 94% of AMZN Prime subs visited in Nov '14 vs. ~95% last year, while 70% of non-Prime subs visited vs. 73% in Nov. '13. EBAY results remained pressured, down 1.5% y/y, and saw no seasonal benefit from Oct to Nov, down 0.5% m/m versus +1.6% m/m for the overall industry.

AMZN's total purchasers declined 2% y/y (total respondents), the first y/y decline since we began our survey in December ’12. The disappointing purchaser results were driven by less non-Prime purchasers and lower overall purchase conversion rates, offset to some degree by higher Prime sub mix, which are also higher frequency purchasers. In November, ~82% of Prime subs purchased goods compared to 43% of non-prime customers, as Prime purchasers now number 41% of total Amazon purchasers, an all-time high vs. 31% a year-ago. Looking at EBAY, purchasers in November were flat y/y and declined nearly 2% m/m to 21%.

Overall, EGM categories were strong, as total purchasers increased 20% y/y across ~20 different product verticals; Men’s Apparel (+38% y/y), Toys (+26% y/y), and Personal Care Products (+26% y/y) recorded the largest gains in total number of purchasers in November for Top 10 categories.

Offsetting upside in the EGM categories, were declines in Media categories, as total Media purchasers declined 11% y/y, given weakness in Books (-9% y/y), CDs/DVDs (-12% y/y) and Video Games (-13%). Media categories comprise 3 of the top 5 purchaser categories. The data supports our ongoing view that video and music consumption is shifting to Digital and Cloud based media off of Amazon through services like Netflix, Pandora, and Spotify. Also the paid for digital music or video content categories declined significantly. Our view is that AMZN doesn’t have the device footprint to capitalize on the shift from physical to digital/cloud and is losing share to iOS and Play stores as well. See our recent work on this topic including our in depth analysis of AMZN’s NA Media segment

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