Diaper Wars

A couple of weeks ago this Business Week cover story about Amazon.com versus Diapers.com caught my eye not only because of my role here at Compete but because of our newfound diaper duty at home.

The article delves into the challenge Diapers.com poses to the web’s “Goliath” and I wanted to further look into how this translated into traffic. First, I checked in with our resident CPG expert, Debra Miller Arbesman who confirmed that “diapers were one of the first CPG products that consumers bought online and as the online CPG market matures over the next couple of years, baby care purchases are only expected to increase”.

Then I turned to our panel of 2 million U.S consumers to check for online behavior and found that Diapers.com’s traffic has more than doubled in the past two years reaching nearly 1.7MM at its peak. More interesting though, is that this past September, more than 25% of Diapers.com shoppers did not visit Amazon.com that month. If we stop to think about it, Amazon.com – the web’s top e-retailer in terms of sales – isn’t reaching over a quarter of Diapers.com’s audience.

Some of the factors that could be contributing to Diapers.com’s ability to reach untouched consumers could be their viral referral program as well as their offline marketing efforts (coupons, catalogs etc.)

It’s clear Amazon isn’t ignoring the challenge Diapers.com has posed. The two sites have been meeting each other’s hefty discounts for these low margin items – what was a 15% discount recently grew to 30% through the respective programs: Amazon’s “Subscribe and Save” and Diaper’s Cashback.

Amazon.com also launched Amazon Mom in September in an effort to further drive parent loyalty to the site by waiving or refunding the Amazon Prime membership with its various benefits. The campaign generated almost 300K visitors in its launch month, roughly equivalent to a third of Diapers.com’s traffic that month. Amazon may be able to create that intimate, personalized feel created by a smaller site like Diapers.com through tailoring to specific consumer segments. They did so this summer with Amazon Student reaching almost 700K scholars.

Here at Compete we’ll continue to watch the cyber diaper feud – look out for our next report on diaper conversions on the two sites.