Range Hoods Category Performance is Bottom Class of Key E-Commerce Metric, 'Revenue per Asin'
Range Hoods is a struggling category.
Production Lead: Eric Jackson
Editor:
Sam Bernards
Published July, 2022
Why is the 'Range Hoods' category underperforming?
The 'Range Hoods' category has plopped on the bottom stratum in the E-commerce metric, 'Revenue per ASIN', within the last 30 days, placing its brands and products among the E-commerce underdogs. Currently at $15,871, this is a 87.0% reduction from the recent average 'Revenue per ASIN' of $121,666 within the E-commerce sectors we cover.
Why is revenue more distributed than other categories?
We regularly witness revenue distribution among the products of any given category is as exponential shape, with the category leaders of the top 10 earning more than the rest of the category, combined. The 'Range Hoods' category now has an uncommon shape: a broad distribution that spans beyond the top 10 products, with the current top 10 only earning 30.5% of the best sellers revenue. This shows that there may be seasonal factors causing category leaderhip rotation, or possibly a broad range of brands with exceptional performance. One implication is that brands can expect this category to move more fluidly, creating opportunities for good performers to break into the leadership roles and experience the elevated revenue as a consequence.
Why does this brand perform better than all the rest?
As the category leader, 'Broan-NuTone' is earning revenue that is 130% higher than the average revenue of the other category leaders in the space, which is significantly more--a signal that this brand has a strong position and good algorithmic performance. It's product rating of 4.4 is 1% higher than the category average. And with 840 reviews, it has earned 1% more reviews than the category average.
What is happening with 'Reviews Per Asin'?
The 'Reviews per ASIN' measure is a measure of consumer conversion within the category. A high level is a flag that there is a blend of good consumer demand and good brand performance on customer service and satisfaction, and that the competitive landscape is full of good brands that may be difficult to displace. A low level is a sign that there are fundamental problems, and that there is opportunity for brands to compete and win in a relatively weak competitive landscape.
Why are prices weakening?
Because lower price point products frequently struggle to yield sufficient contribution to drive profitable growth for brands, categories with price points beyond certain levels can be attractive. One of the categories that has crossed the $100/item price point threshold is 'Range Hoods', in which the best selling products have an average price of $243.13. Thirty-day revenue within the top ten products ranges from $34,686 to $62,450. In order to break into the top ten products and experience the exponentially higher revenue this affords, products will need to maintain an average rating of 4.5 and earn at least 134 reviews. In order to ensure a level of margin that is at least average, brands should aim at a maximum fully-landed COGS of $60.78
To conclude, category performance of the top brands and products within 'Range Hoods' shows that it is struggling to gain consumer confidence. While this may be an opportunity for the brands which are willing to persist in marketing the category's presence and products until consumers show a critical mass of conversion, astute brands will round out their product portfolio with other categories instead of being reliant on this one, the wide-spread revenue that we can see in the 'Range Hoods' category implies a higher level of leadership change than average, which can be the basis of opportunistic growth for astute brands, the recent high of the 'Reviews Per Product' metric is a a crucial signal for the leading brands in the 'Range Hoods' category. For those brands which have products in this category but have not yet expanded into E-commerce, consider this to be your call to action before incumbents become too entrenched., the relatively high average price point of the 'Range Hoods' category can be attractive for brands which can manufacturer and ship products at that price point and still maintain contribution margin.