Rising Amazon Competitor, Brandless, Grew Customer Spend 400%+

Value-priced grocery and household goods alternative Brandless saw uptick across online customer spend, new customers, and order volume in the past year.

Key Takeaways

• Brandless order volume and buyer counts grew 326% and 293% over the same period

• 20% of customers who made a first Brandless purchase in Q2 returned in Q3

• In September 2018, more than half (53%) of Brandless online purchasers were new customers

Online merchant Brandless launched in the summer of 2017, offering grocery, personal care, and household supply products for $3 each. The company is backed by $292.5 Million in venture capital funding and founded by serial entrepreneur and disruptor, Tina Sharkey. Brandless aims to take on competing value-priced e-commerce brands like Amazon, Walmart and Target with the idea of adding value to the consumer by selling quality merchandise, without a so-called "brand tax." To determine whether their efforts at grabbing a slice of the market have been successful, Edison Trends examined Brandless’s online sales performance direct from its website Brandless.com.

How was Brandless sales performance in the past year?

Between October 2017 and now, Brandless customer spending has grown about 413%. Order volume and buyer counts aren't far behind, growing about 326% and 293% respectively.

Figure 1a. Chart shows online sales growth by month across order volume, average spend, and buyer count, between October 2017 - September 2018, according to Edison Trends. “1x" means "1x the October 2017 amount."


In September 2018, more than half of Brandless' customers (53%) were making their first purchase from the merchant. This figure, which has hovered between 49% and 56% since last May, is down from a year ago. Last October, a few months after the site's launch, 83% of customers were new to the merchant.

Figure 1b. Chart shows % of Brandless customers who made their first Brandless purchase each month, between October 2017 - September 2018, according to Edison Trends. “1x" means "1x the October 2017 amount."

About 70% of customers purchasing from Brandless in the last twelve months placed only one order, while 17% placed two orders, and just 3% placed over five orders.

Figure 1c. Chart shows % of Brandless online buyers average number of orders between October 2017 - September 2018, according to Edison Trends.

Is Brandless retaining more or fewer online buyers than competing brands?

Brandless buyer retention figures outshine those of some players, such as Target, but falls far short of the immense loyalty Amazon receives. About 20% of customers making their first Brandless purchase in Q2 of this year returned to Brandless in Q3. Amazon’s retention for the same period was 48%, with Walmart at 19%. Target had only 15% of new online customers return the following quarter.

Figure 2a: Chart shows percent of customers making their first online purchase in Q3 2018 who returned for another purchase from that merchant in Q3, according to Edison Trends.


Figure 2b: Funnel shows percent of Brandless customers making their first online purchase in Q4 2017 who returned for another purchase from that merchant in following quarters, according to Edison Trends.


How does spend per order compare between Brandless and its competitors?

Brandless, with its low, one-size-fits-all $3 pricing and limited selection, saw customers spend just $34-35 per order on average over the last year. Instacart, meanwhile, with its large selection as well as delivery and service fees and tips, had the highest average spend. Instacart also showed some of the most growth, moving from a $100 per order average in Q4 2017 to $108 in Q3 2018. Walmart, Thrive Market and Target were in the middle of the pack, with average spend between $60 and $83 per online order. Amazon, Brandless and Hollar were all at the bottom with an average spend of $30 to $38.

Figure 3: Chart shows average customer spend per online order by quarter during the time period of October 2017 - September 2018, according to Edison Trends.


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*The data shown is based on a sample of anonymized and aggregated e-receipts from millions of consumers in the United States.