These charts show how COVID-19 is helping smaller consumer brands steal share on Amazon after their giant competitors ran out of stock (AMZN)

Sarah Jacobs

  • Newer challenger brands on Amazon are showing up more often on Amazon's first-page search results after legacy brands ran out of stock during COVID-19, according to a new report by e-commerce research firm Profitero.
  • For example, the four largest brands in the toilet paper category accounted for 92% of Amazon's top search results in January, but that dropped to 49% in March as they ran out of stock, Profitero data shows.
  • That's creating new opportunities for newer, challenger brands to show up on Amazon's first-page search results, where most of the purchases occur.
  • As a result, more consumers are switching brands in certain categories because they've become more familiar with the newer brands.
  • Visit Business Insider's homepage for more stories.

Many consumer brands saw their products run out of stock during the peak COVID-19 months of March and April. 

That has turned out to be a huge opportunity for smaller and newer challenger brands, as they're more frequently showing up as top search results on Amazon, leading to increased sales, according to a new report from e-commerce research firm Profitero.

For example, in January, four of the biggest toilet paper brands (Georgia Pacific, Kimberly Clark, P&G, and Amazon) accounted for 92% of the search results on Amazon's first page. But by March, as COVID-19 caused those companies to run out of stock, newer brands, like Aqua-Soft and General Supply, stole the top product listings on Amazon — taking up 51% of its first-page search results for toilet paper.

Profitero President Sarah Hofstetter said the change creates more opportunities for consumers to switch brands than ever because more than 70% of e-commerce purchases come from first-page product listings, according to Profitero data.

"COVID-19 dealt brands a whammy when they were understandably caught off guard on supply," Hofstetter told Business Insider. "But now that supply levels are back up and consumers have sampled elsewhere, the old brands aren't part of the routine anymore."

Similar trends were seen across different categories, Hofstetter said. Dry pasta, for example, saw newer brands account for 35% of page one in January, which rose to a high of 53% in March. Smaller brands in the disinfectant wipes category saw their first-page search share jump to a whopping 92% in May from 26% in January, while emerging hand soap brands experienced a similar gain to 63% from 22% during the same period.

This may lead to more people ditching the legacy brands they're more used to buying, according to Profitero. Almost 53% of dry pasta consumers bought a different manufacturer's product in April, and 41% of disinfectant wipe shoppers switched to a different brand by April, its data show.

Hofstetter said brands will simply have to work extra hard to win back the digital shelf real-estate and consumer mindshare. To do that, brands will have to spend more on marketing and run smarter promotions, while making sure product content is indexed for relevant keywords. It's also important to cover the basic stuff, like staying in stock, pricing competitively, and having enough product ratings and reviews, to improve organic search rankings on shopping sites, she said.

"Brands have to behave as insurgents to earn attention, trust and love," she said.

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