November 01, 2017
Amazon Now Key Player in Health and Wellness Sector
The “Amazon Effect,” the disruption of the retail market by the online giant, made many in the direct selling channel take notice regarding their e-commerce and customer service practices. Now Amazon’s purchase of eco-minded natural grocer Whole Foods is helping it to become a formidable challenger in another area that has typically been strong in direct sales: the health and wellness space.
A new report from One Click Retail, a market leader in e-commerce data measurement, found that Amazon’s sales in the health and wellness channel grew by 30 percent in the past 52 weeks. The total category size was $2.55 billion, comprised of nutrition ($1.8 billion in sales), followed by wearable health devices ($600 million) and wellness and relaxation ($150 million).
Nathan Rigby, Vice President of One Click Retail, noted Amazon’s investment in Whole Foods was a direct response to the consumer trend towards clean, natural products containing fewer ingredients and minimal processing. The acquisition of Whole Foods allows Amazon to retain customers that might have otherwise gone to a competitor.
The One Click Retail report found a strong demand for sports nutrition among Amazon customers—an estimated $590 million in sales—followed by herbal/minter supplements ($530 million), vitamins/multivitamins ($250 million), diet supplements ($180 million) and meal substitutes ($90 million).
The sports nutrition subcategory is driven mainly by sales of standard sport drinks and powders, representing 70 percent of the category; another 27 percent is made up by nutritional bars. The remaining 3 percent contains nutritional foods, a segment that witnessed double the sales during the past 52-week period as compared to the previous 52 weeks.
Amazon announced in June that it was acquiring Whole Foods Market Inc. for approximately $13.7 billion in cash.