Boomerang-ConsumerElectronics-RAR

Retail Analytics Report

Boomerang CommerceRetail [email protected]

February 2016

Electronics

Retail Analytics

February, 2016

Electronics

Data Research by Boomerang Commerce

Executive SummaryThe Boomerang Commerce Retail Analytics Report kicks off 2016 by returning to the consumer electronics category, but this time our analysis covers a much larger market basket – over 4,400 products – than the 1,200 SKUs studied in the September 2015 Report. This report compares price and assortment data from Amazon, Walmart, Target, Jet, Newegg, and Best Buy. For the Report methodology, please see page 14.

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Key FindingsPricing of all the retailers is within a fairly tight range of 15%. Amazon is the most price-competitive; Jet is just 2% higher-priced. Newegg’s PPI of $115 is the highest.

Amazon discounts the most widely and deeply. Its price advantage is most pronounced in popular, head products. On tail products, though, Amazon has the highest prices.

In key categories of Cameras and Computers, Jet is the most price-competitive.

Following holiday discounting, retailers returned to their September pricing levels.

Sony is the brand found most widely and in the highest frequency among these retailers.

PLACE HOLDER IMAGE

Retail Analytics

February, 2016

Electronics


Amazon achieves a significant pricing advantage in consumer electronics, relative to most of its competitors in the study. Jet is the second most price-competitive, at less than 2% more costly than Amazon.

Across all products studied, the six retailers price in a fairly tight range, with Newegg, the highest-priced of the bunch, not quite 15% above Amazon. The variances in pricing are larger when the sample of 4,417 products is broken into categories. In the key aspect of assortment, Newegg has the broadest match (PAI of 49%) with Amazon, while Walmart is close behind at 43%.

ALL Products

$101.78

$106.41

$106.94

$107.69

$114.49

26.46%

9.42%

33.11%

43.06%

48.54%

*Based on the 4417 products researched by Boomerang Commerce. Walmart has 1460 matching products, Target has 220, Jet has 943, Best Buy has 990 and Newegg has 1823.

Jet is only 2% higher-priced than Amazon across their shared assortment included in this report. In contrast, at the high end, Newegg shows a PPI of $114.5.

$100.00 100%

Pricing of all the retailers is within a fairly tight range of 15%. Amazon is the most price-competitive; Jet is just 2% higher-priced. Newegg’s PPI of $115 is the highest.

Amazon discounts the most widely and deeply. Its price advantage is most pronounced in popular, head products. On tail products, though, Amazon has the highest prices.

In key categories of Cameras and Computers, Jet is the most price-competitive.

Following holiday discounting, retailers returned to their September pricing levels.

Sony is the brand found most widely and in the highest frequency among these retailers.

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PRICE PERCEPTIONINDEX

PRODUCT ASSORTMENTINDEXRETAILER

Amazon

$115

$100

$105

$100

BUBBLE SIZE REPRESENTS PRODUCT ASSORTMENT INDEX

PRICE PERCEPTION INDEX

Retail Analytics

February, 2016

Electronics


Amazon



HEAD Products

Amazon’s pricing advantage in consumer electronics is most pronounced in head items. Jet comes next, with a PPI of $104. 64% of Jet’s head products in the study are priced below, or equal to Amazon’s pricing. After Jet, the closest competi-tor in terms of pricing – Best Buy – is still 9% above Amazon on head products.

Newegg has the broadest selection of head items with a PAI of 55%, but also has the highest pricing of the group, with its PPI at nearly $117.

69% of Walmart’s selection of head products are priced higher than Amazon.

$104.17

$109.21

$112.19

$113.42

$116.89

31.26%

41.73%

51.47%

12.88%

55.07%

$120

$110

$100

$90

0% 20% 40% 60% 80% 100%

Price of Head Items Compared to AmazonJet prices the closest to Amazon on head items, with a price disadvantage of slightly over 4%.


173

56

117

24

68

129

16

541

157

514

$100.00 100%


4


SAME

LOWER-PRICED

HIGHER-PRICED

128

43124 143 575

177

Retail Analytics

February, 2016

Electronics




CORE Products

On core, medium-popularity products, Amazon faces broad assortment competition only from Newegg (PAI of 30%) and Walmart, (PAI of 21%). Walmart is priced below Amazon on core products, with a PPI of $98 and 41% of its inventory in the study priced below Amazon. Jet’s pricing is slightly below Walmart’s, and 71% of its core product overlap with Amazon is priced the same as, or less then, Amazon.

The specialty retailers are priced higher in the group; Best Buy is 4% and Newegg is 12% more expensive than Amazon. Newegg’s PAI of 31% is by far the highest in this segment.

$97.83

$98.24

$100.00

$104.23

$112.03

12.80%

20.74%

100%

10.95%

30.46%

Price of Core Items Compared to Amazon On core items, the mass merchants all price slightly below Amazon, while the specialty retailers are more expensive. Newegg has the largest core assortment in the research basket, after Amazon.

*Based on the 1461 Core products researched by Boomerang Commerce. Walmart has 303 matching products, Target has 11, Jet has 187, Best Buy has 160 and Newegg has 445.

$96.01 0.75%

5

0% 20% 40% 60% 80% 100%

5

77

124

49

55

39

22

140

89

55

SAME

LOWER-PRICED

HIGHER-PRICED

4

16139 45 261

2

Amazon

$120

$110

$100

$90



Retail Analytics

February, 2016

Electronics


TAIL Products

On tail electronics products, Amazon has the highest prices. Jet and Walmart are the most competitive when both price and assortment are taken into account, with PPIs around 10% below Amazon. Walmart has a substantial assortment with a PAI of 26%. Jet's PAI is 20%

Newegg has a larger assortment, showing a PPI of 38%, but is higher priced than the rest, at just 2% below Amazon.

76% of Jet’s tail products and 71% of Walmart’s are priced below Amazon. Target, which focuses on head products, has few tail products in common with Amazon.

$67.47

$89.71

$92.42

$97.93

$100.00

0.84%

19.48%

13.45%

37.56%

100%

Price of Tail Items Compared to Amazon



*Based on the 1427 Tail products researched by Boomerang Commerce. Walmart has 370 matching products, Target has 12, Jet has 278, Best Buy has 192, and Newegg has 536.

In tail items, Amazon is the most expensive of the group. In tail items, Amazon is the most expensive of the group. Newegg has the largest selection in the research basket, after Amazon.

$91.08 25.93%

6

0% 20% 40% 60% 80% 100%

263 20 87

SAME

LOWER-PRICED

HIGHER-PRICED

12

16

37212 29

55132 5

156296 84

Amazon$105

$90

$75

$60



Retail Analytics

February, 2016

Electronics


Pricing Trends

Between the September and January analyses that we conducted, there were substantial movements in discounts and pricing, especially leading up to Black Friday and Cyber Monday. Yet after the holidays, these major retailers regrouped and returned to their previous pricing relative to Amazon, in consumer electronics. Best Buy’s relative pricing went up by less than one percent, from a PPI of 106.1 to 106.9 as it pulled back on both the frequency and depth of its discounting.

On head products, every retailer ended up less competitive in January, based on pricing versus Amazon with the biggest increases observed for Walmart and Target. Jet was relatively stable compared to the rest of the group.

There was major repositioning in core products, as Walmart gained significant competitiveness, lowering its PPI markedly from 108 to 98. Target showed improved price competitiveness that was nearly as marked, going from 104 to 96 PPI. Jet improved slightly, while Best Buy slipped slightly in price competitiveness with its PPI rising to $104.

In tail products, Best Buy made a large jump in price competitiveness, from a PPI of nearly 105, all the way down to just over $92. Walmart improved a few points to a PPI of $91, while Jet went the other direction, going from PPI nearly $82 in September to almost $90 in January.

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The retailers studied in both the September and this report on consumer electronics returned to their pre-holiday pricing relative to Amazon. Within core and tail product segments, major pricing shifts were put into play.

99SEP’15 JAN'16

100

109

PPI Trends - All Products

95

100

115

PPI Trends - Head Products

95

100

PPI Trends - Core Products

Amazon

Amazon

Amazon

Amazon

80

100

PPI Trends - Tail Products

*Newegg was not in Sep'15 report hence excluded from the trend analysis

109

105

WALMART+0.3

BEST BUY+0.8

TARGET-0.4

JET+0.4

WALMART+3.9

BEST BUY+2.0

TARGET+5.8

JET+0.5

WALMART-10.5BEST BUY+1.3

TARGET-8.1

JET-2.6

WALMART-3.1BEST BUY-12.4

JET+8.1

SEP’15 JAN'16

SEP’15 JAN'16

SEP’15 JAN'16

Retail Analytics

February, 2016

Electronics


Discount Analysis

Amazon discounts more than half (54%) of its inventory in the research basket, with a median discount of 39% off list price. Newegg follows Amazon, discounting 42% of its items studied, at a median discount of 26%.

Jet does not discount any of its CE products, and Target discounts only 11% of its inventory. In terms of discount depth, however, Target’s median discount of 35%, trails only Amazon.

Discounting saw two distinct shifts between the September 2015 study and this report: Amazon cut back discounting, from 66% of its SKUs researched to 54%, while Target’s median discount depth increased radically from just 15%, to 35% off list price in January.

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*Newegg was not in Sep'15 report hence excluded from the trend analysis

0% 20% 40% 60% 80% 100%

Discount Frequency

43

42.4%

53.5%

20.7%

32.5%

10.9%

0%

PRODUCTS IN INVENTORY WITH A DISCOUNT

Median Discount100%

80%

60%

40%

20%

0%

38.5%34.5%

26.2%22.7% 20.6%

N/A

FROM THE ORIGINAL LIST PRICE

AMAZON

WALMART

TARGET

BEST BUY

JET

0SEP’15 JAN'16

35

70

Discount Frequency TrendAMAZON

WALMART

TARGET

BEST BUY

10

25

40

Median Discount Trend

SEP’15 JAN'16

Amazon, the most aggressive discounter, discounts 54% of its inventory researched for this report, at a median discount level of 38%.

Retail Analytics

February, 2016

Electronics


Brand Overview

Of the 1,455 consumer electronics brands represented in the Report, Sony has the highest coverage (presence in inventories) across this group of retailers, followed by Dell and Samsung.

Newegg carries 41% of the Sony products found at Amazon, along with 57% of the Samsung items – and Asus, at 73% of Amazon’s inventory. Walmart comes closest to matching Amazon’s assortment on Samsung, at 69%, and at 42% for Dell.

Best Buy, the largest of the group in dollar sales of consumer electronics if its in-store sales are counted, favors Sony, Samsung, and Asus brands.

Sony

Dell

Samsung

Asus

1

2

3

4

81

54

37

30

Brands withHighest Assortment

RankSelectionCountBrand

9

0% 25% 50% 75% 100%

TARGET

BEST BUY

NEWEGG

JET

OVERLAP COMPARED TO AMAZON *

WALMART

0% 25% 50% 75% 100%

TARGET

BEST BUY

NEWEGG

JET


WALMART

0% 25% 50% 75% 100%

TARGET

BEST BUY

NEWEGG

JET


WALMART

0% 25% 50% 75% 100%

TARGET

BEST BUY

NEWEGG

JET


WALMARTSony is the most widely carried brand in the study, with Samsung, Dell, and Asus also prominent.

Retail Analytics

February, 2016

Electronics


Computers & Accessories

In the high-ticket subcategory of Computers & Accessories, Jet is the most competitive with a PPI of less than $95. With a large assortment – its PAI is 30% – as well as its low pricing, Jet becomes very attractive to shoppers.

Walmart and Best Buy inhabit the ‘slightly more costly than Amazon’ price range with PPIs of $101 and $102 respectively, and broad assortments.

Newegg fields the largest number of SKUs against Amazon, carrying just over half of Amazon's inventory, but its prices are 7% higher with a PPI of $107.

$100.oo

$101.11

$102.03

$107.05

$136.54

100%

46.21%

29.89%

50.41%

2.68%



Jet may be the retailer to chase in this key category, with a sizable assortment and the lowest pricing by a di�erential of 5%. Amazon, Walmart, and Best Buy bunch together price-wise.

$94.98 29.89%

10

Amazon

$150

$135

$120

$105

$90



0% 20% 40% 60% 80% 100%

Price of Computers & Accessories Compared to Amazon


133

246 55 424

7 2 33

SAME

LOWER-PRICED

HIGHER-PRICED

220 116

117 44 308

43280 76 435

Retail Analytics

February, 2016

Electronics


Cameras & Accessories

Jet is very price-competitive in Camera & Accessories with 78% of its products priced below, or at the same level as Amazon. In this key subcategory, Jet has a PPI of $94.

Specialty Stores, Newegg – with a PAI of 32%, highest in the group – and Best Buy at a PAI of 22% have broader assortments than Jet, and come close to matching Amazon’s prices.

Walmart features a large assortment with a PAI of 25%, and is just slightly more expensive, with a PPI of $103.



Amazon’s toughest price competitor in Cameras & Accessories is Jet, which has a PPI of $94.30 in the category.

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Amazon

$105

$100

$95

$90



$100.oo

$100.13

$101.38

$103.22

$104.44

100%

31.74%

21.99%

25.35%

8.69%

$94.30 13.65%

0% 20% 40% 60% 80% 100%

Price of Cameras & Accessories Compared to Amazon


17

31 37 75

8 1 40

SAME

LOWER-PRICED

HIGHER-PRICED

31 29

16 15 93

4329 54 96

Retail Analytics

February, 2016

Electronics


Example Products

To illustrate contrasting tactics on head and tail products, we chose a Canon PowerShot ELPH 170 IS (Blue) digital camera as the head product, versus another, slower-selling Canon digital camera – the Eos Rebel Sl1 18-megapixel SLR with touchscreen, as the tail product.

On the head product, Jet was the only retailer to match Amazon, at $109. Target and Newegg were next at $120 and $119 respectively. Walmart was not price-competitive, with a much higher price of $150.

It was a different story on the tail product, where Amazon was the most expensive, and far above the price leaders for this camera. Amazon’s price on the Eos Rebel was $650, well above Walmart at $583, and 62% above Newegg and Jet at the $400 level.

We consistently see Amazon offer some of the lowest prices in head items, and some of the highest prices in tail items. This indicates an opportunity for the other retailers to drop their prices on head items to better compete with Amazon. Tail products where Amazon barely discounts offer opportunity for other retailers to increase prices without adversely impacting shopper sentiment or unit sales.

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$109

$150

$120

$109

$120

$119

4.2

4.5

N/A

N/A

4.3

N/A

109

N/A

N/A

N/A

129

N/A

$650

$583

N/A

$399

$400

$399

N/A

N/A

N/A

N/A

4.9

5.0

N/A

N/A

N/A

N/A

35

N/A

RATING(OUT OF 5)

RATING(OUT OF 5)

# OF REVIEWS RETAILER PRICE PRICE # OF REVIEWS

TAILEos Rebel SL1By Canon

PowerShot ELPH 170 ISBy Canon

HEAD

Retail Analytics

February, 2016

Electronics


Report Terminology

To account for variance in products offerings at each retailer, we use Amazon as the base-line due to its position as the largest online retailer. Our indices are based on Amazon Best Seller items as well as a selected assort-ment of medium- and low-popularity prod-ucts. This creates a broadly representative basket of items for measuring each retailer’s product prices, weighted basket price and product availability. For each retail category (toys, electronics, kitchenware, etc.), we assume that the top 20% of products are head items, the middle 50% are core items, and the remaining 30% are tail items. Based on this assumption, on January 4th 2016, we select 1,480 items from each popularity tier for our analysis, for a total of 4,417 items offered by Amazon. We then seek and match (with more than 95% accuracy) the identical products at the other retailers to gauge assortment simi-larities and compare prices.

Methodology

We used the following proprietary measure-ments and indexes developed to track price and assortment of a large basket of items sold online.

Price Perception Index – A proprietary index tracking gross price differences across the six retailers chosen for this report, covering a basket of 4,417 products (SKUs). The Price Perception Index is normalized to Amazon to establish a relative baseline. It is weighted to accurately reflect the pricing of “head”, “core”, and “tail” items across the same six retailers covering 4,417 products.

Product Assortment Index – A proprietary index reflecting the overlap of products between two retailers. Product Assortment Index is normalized to Amazon to establish a relative baseline. It is weighted to accurately reflect the pricing of head, core, and tail items across the same six retailers covering 4,417 products.

Head – This term describes frequently purchased, popular products that are listed among the Amazon Best Sellers. Head products most strongly influence customer perception of whether a product is expensive or inexpensive.

Core – This describes products of medium popularity that are regularly purchased but are not among Best Sellers and are not as popular as head products.

Tail – This term refers to infrequently purchased products having the least impact on customer perception of a retailer as expensive or inexpensive.

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Boomerang CommerceRetail [email protected]

Founded in 2012, Boomerang Commerce offers the first guided-analytics suite for modern retailers. Nine of Internet Retailer’s Top 50 already rely on Boomerang’s Retail Solutions Suite. Built by a team from Amazon, Google and Walmart.com, Boomerang applies machine learning and big data analytics to massive data quantities across digital and brick-and-mortar channels. Boomerang’s technology derives superior insights and actionable recommendations to transform business decision makers into retail ninjas. For more detail, please visit www.boomerangcommerce.com.

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