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House-brand cold remedies are hot site search topics for major retailers

March 3, 2016 12:45 PM
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When it comes to cold and flu remedies in their own search results, big e-retailers say ‘promote thyself.’ Private-label products outperform name brands for some of the largest retailers’ web search results in the cough, cold and allergy products category in the U.S., according to a recent study by Clavis Insights, titled “US Analysis of Cold and Flu Remedy Brands Online Channel Search Performance.”

In the most striking example, Wal-Mart Stores Inc.’s private-label Equate brand cold remedies took the top 11 spots in a search for “cold & flu” on Walmart.com, and 13 of the top 20 spots in first-page search results. Equate has a 4.6% share of the overall cough, cold & allergy market, according to global research firm Euromonitor.

Private-label products offer a way for some retailers like J.C. Penney, No. 37 in the Internet Retailer 2015 Top 500 Guide, to compete online with Amazon.com Inc. (No. 1). Higher profit margins on private-label products are the main attraction and in Penney’s case such products account for more than half of company sales, CEO Marvin Ellison said on a November Q3 earnings call.

In the Clavis report, CVS Caremark Corp. and Walgreen Inc., with 4.4% and 5.5% cough, cold and allergy market share respectively, according to Euromonitor, both return three private-label items in the top 20 positions in their websites’ search results for “cold & flu.” And Peapod.com Inc.’s private-label brand, CareOne, accounts for one-fifth of the top 20 returns for the search term. CVS is No. 109 in the Internet Retailer 2015 Top 500, Walgreen is No. 44 and Peapod No. 69.

Clavis, an e-commerce analytics company, studied search results on Amazon.com, CVS.com, Peapod.com, Walgreens.com and Walmart.com (No. 3) from Jan. 8-11.

Placing high on site search offers a low-cost opportunity for online retailers to promote their products and reap the rewards of better margins, but there are caveats, says Lauren Freedman, president of online retail research and consulting firm The E-tailing Group Inc.

“It’s not just about whether online retailers can do private label, they have to do it right,” Freedman says. “Investments are hefty and they have to own the inventory. If not, then it’s basically a marketplace.”

In the Clavis study, marketplace sellers fared well in site search results on Amazon.com and Walmart.com. Of 1,934 items in Walmart.com’s “Cough, Cold & Flu” product line, 78% are sold by marketplace sellers. A search for “cold & flu” returned 78,444 products, two-thirds of which are sold by marketplace sellers. Despite marketplace sellers’ prevalence, none of the top 20 items in the “Cough, Cold & Flu” menu or the top 20 items returned in a search for “cold & flu” were marketplace items.

Amazon.com offers more marketplace items and 94% of the 4,285 “cold & flu relief” items are marketplace products. 30% of the top 20 items returned in a search for “cold & flu” at Amazon are marketplace items.

Vicks is the strongest brand performer in the Clavis analysis, holding second place in the total U.S. market. Though the brand doesn’t win any top 20 spots in a search for “cold & flu” at either CVS.com or Walgreens.com, it dominates top 20 search results at Amazon.com, Walmart.com and Peapod.com where it takes 25%, 32% and 60% share of first page search results, respectively.

Brands are missing opportunities at Walgreens.com. Only two of the top 20 products returned in a search for “cold & flu” on the website are truly cold and flu products: Similasan Junior Strength Cough & Fever Relief Quick Dissolve Tablets and Homeolab USA Kids Relief Flu Oral Liquid, Clavis reports. The other 18 are cough drops and sprays, nasal products, allergy medications and other related products. This is despite Walgreens.com’s 145 items under its “Cold & Flu Medication” menu. “Brands don’t appear to be optimizing their content to win against key search terms at Walgreens.com,” Clavis says. Of the top three items in the “Cold & Flu Medication” menu, which all have “cold” or “flu” in their product titles, none mention “cold” or “flu” anywhere in their product description.

 

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