Amazon.com, Inc. (NASDAQ:AMZN) is known by many as the place to find a deal. But is that always the case? It should come as no surprise to savvy shoppers to know that it depends on what you buy. Bernstein analysts discovered that while Amazon does offer great deals on electronics, consumers may be better off buying any of their consumer packaged goods somewhere else.

Amazon vs. Retail Stores In Pricing

A new battleground for ecommerce

In a report dated Sept. 16, 2014, analysts Ali Dibadj, Carlos Kirjner, Aleia Howard and Peter Paskhaver said ecommerce still holds a pretty small part of the market, but it is rapidly gaining share, especially in some categories. In their pricing survey, they found that 9.4% of consumer health goods are bought online, while 6.1% of beauty and personal care goods and 5.8% of pet care goods are bought through ecommerce in the U.S.

They add that baby goods, which is a subcategory of personal care and retail tissue and hygiene, is rapidly rising as well, mostly due to online purchases of diapers and training pants. They also found that home care, tissue and hygiene not counting diapers and packaged food are essentially “unrepresented” in ecommerce.

Amazon holds high potential for market share expansion

The Bernstein team estimates that total U.S. ecommerce spending in the U.S. is around $1.3 trillion, with half of that made up of food and consumer packaged goods. They say Amazon makes up less than 35% of total consumer spending in the U.S., leaving the rest of that amount under penetrated.

They add that about 40% of Amazon shoppers have bought consumer packaged goods from the website within the last six months. The company launched its Amazon Prime Pantry in April, so they think it will expand its share in consumer goods and food products.

Where Amazon leads—and lags behind—in pricing

The analysts say Amazon does lead in pricing for electronics. Even when considering promotions in retail stores, they say the online retailer’s prices were still lower. Among retail stores, Best Buy Co Inc (NYSE:BBY) had the lowest prices on electronics, followed by Target Corporation (NYSE:TGT) and then Wal-Mart Stores, Inc. (NYSE:WMT). They noted that Wal-Mart’s website had better prices than its stores did, but those prices were still lower than Amazon’s.

The Bernstein team found that food and beverage products sold directly by Amazon were usually priced higher than those at physical retailers. However, the online retailer did price lower in some specialty subcategories. In others, Amazon’s prices were in line with Wal-Mart and Target but lower than grocery stores.

They believe that as Amazon expands into consumer products with Amazon Fresh and Prime Pantry that the pricing wars with brick and mortar retailers will increase. In the long run, they see pricing pressure on brick and mortar retailers, which they think will extend to consumer goods companies.

The Bernstein analysts continue to rate Amazon as Outperform with a $450 per share price target.