How Amazon is infiltrating the large appliances category
For a time, big-box home improvement stores seemed insulated from Amazon’s low prices and scale. Home Depot and Lowe’s sold items that were too big to ship, or that DIYers needed immediately, not delivered in a few days. Large appliances like refrigerators and ovens offered a firewall of sorts. Has that firewall held? Yes and no.
The large appliances category has historically been dominated by big-box retailers, however, sales of large appliances like refrigerators, ovens, and washers & dryers are declining. In Q2 2023, Home Depot reported that big ticket transactions above $1,000 were down 5.5% year over year (YoY).
But that’s not because Amazon is grabbing a bigger share. Quite the opposite. Amazon’s market share in larger appliances is generally low and in a downward trend.
The inverse is true for smaller appliances like coffee makers, vacuums, and clothes irons, where Amazon has seen gains. Their aptitude for selling smaller appliances appears to have given Amazon the means to crack into categories traditionally reserved for big box retailers like the freezer category, for instance.
Items in the freezer category span everything from chest style, to upright, to portable, to ice makers, and it's in this latter sub-category that Amazon sees an opportunity to infiltrate an area filled with big ticket items.
Ice makers represent 40% of the total freezer market (as of YTD 2023), and have experienced strong growth recently, up 10 pp YoY. Amazon dominates in ice makers with 61% of the market share in 3Q23. They are mostly selling the portable, countertop style ice makers, however, and do not appear to be moving industrial ice makers, or stand up style refrigerators with integrated ice makers.
This activity tends to support the idea that Amazon won’t be challenging Home Depot or Lowe’s anytime soon when it comes to large appliances like refrigerators and chest style freezers. But it does show that Amazon is willing and able to take share from appliance categories when the items are smaller, and, ostensibly, easier to ship.
Read YipitData’s Amazon in Home Improvement report to further unpack Amazon’s performance across other home improvement categories.
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