How Amazon’s dominance in consumer packaged goods can help score brand loyalty

Amazon.com Inc.’s dominance in the consumer packaged goods space can teach Wall Street a lot about brand loyalty in a e-commerce world, with search trends suggesting consumers tend to stick with their favorite laundry, diapers and adult continence brands, according to AllianceBernstein.

Where consumers are least loyal, is when they look to buy trash bags, paper towels and cat litter.

Amazon’sAMZN, +0.37%retail platform in the U.S. is estimated to have driven about 80% of online consumer packaged goods growth. With that in mind, analyst Ali Dibadj said Bernstein firm developed a way, using some outside sources — “and an excellent millennial summer associate” — to track search volume of keywords and brands. A “Relative Search Volume” score was created, he said, to gauge how important a specific brand is to shoppers in a broader category.

“This is to analyze whether big brands are more challenged as spending shifts increasingly to e-commerce, while also assessing the relative performance of our coverage names online,” Dibadj wrote in a note to clients.

Using the average RSV scores for the most-searched and second-most-searched brands in each category, Kimberly-Clark Corp.KMB, -0.81% and Procter & Gamble Co.PG, -1.58%were the “most advantaged” companies, as their categories typically yielded stronger brand loyalty. Moreover, Dibadj said those companies outperformed on search relative to peers “in categories that are key revenue drivers for them.”

P&G had the highest actual sales-weighted RSV score at 84, as its laundry brands include Tide and Downy, its diaper brands are Pampers and Luvs and its incontinence brand is Always Discreet. Kimberly-Clark was second at 63, as its diaper brands include Huggies and Pull-Ups while incontinence brands include Depend and Poise.

The highest individual category RSV scores belonged to P&G’s Downy at 241 and P&G’s Pampers at 114.

Separately, Clorox Co.CLX, +0.25%and Edgewell Personal Care Co.EPC, -2.05% were tied for the lowest RSV scores of their peer group at 24, which suggests the companies compete in the most commoditized categories.

In the weakest categories, Clorox’s brands include Glad trash bags and Fresh Step cat litter and Edgewell’s is Litter Genie cat-litter disposal system.

Bernstein’s analysis hasn’t necessarily meshed with stock performance in the past year, however.

Over the past 12 months, shares of P&G have shed 12% and shares of Kimberly-Clark have slipped 3.4%, while shares of Clorox have rallied 10.4% and shares of Edgewell have tumbled 26.5%, while the SPDR Consumer Staples Select Sector exchange-traded fundXLP, -0.45%has lost 2% and the Dow Jones Industrial AverageDJIA, -0.48%has rallied 19.2%.

Meanwhile, Amazon’s stock has doubled, up 101%, over the past year.

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