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Wayfair (W) Could be Taking Home & Garden Share from Amazon (AMZN) - Cowen

June 1, 2015 12:02 PM EDT
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Cowen and Company is introducing its Home and Garder Tracker today.

Analyst John Blackledge noted that the effort will be done in conjunction with its monthly Internet Retail Tracker. The firm surveys about 2,500 U.S. consumers across Amazon.com's (Nasdaq: AMZN) top 30 product categories.

Blackledge said, During the first 9 months of '14, AMZN's Home & Garden purchasers largely grew in line with the overall number of EGM purchasers, +13% y/y vs. +15% y/y. Since Oct. '14 (through 1Q15), which coincides with Wayfair’s IPO and ramp in marketing/advertising, AMZN's H&G purchaser growth relative to overall EGM growth has decelerated, with H&G growing ~5% below EGM in 4Q14 (+15.7% y/y vs. +20.3% y/ y) and ~14% below in 1Q15 (+3.5% y/y vs. +17.1% y/y). Furthermore, with 2/3 of 2Q in the books, H&G is under-performing EGM by ~5% (+27.6% y/y vs. +32.3% y/y), though AMZN's May '15 H&G purchaser growth did accelerate with 31% y/y growth (vs. 11% y/y growth in April '15) and grew almost in line with overall EGM (+33% y/y).

Explanations include:

  • AMZN's H&G purchaser base is saturated or it is a lower priority than Apparel / Consumables categories, where purchaser growth has been significant;
  • W is having an impact on AMZN's Home vertical, as W's customers increased 54% y/y in '14 (albeit off a lower base); and/or
  • Other retail and eCommerce Home companies are gaining share.


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