retail news in context, analysis with attitude

GeekWire reports that Amazon "has made a behind-the-scenes change to one of its most important technological formulas, with big implications for the millions of customers who rely on Amazon customer reviews to decide which stuff to buy — and for the companies hoping to sell lots of stuff to those millions of customers.

"With the help of a new machine-learning algorithm, Amazon will give greater weight to newer, more helpful and verified customer reviews (written comments) and ratings (the 5-star system) when determining top reviews to display, and when calculating a product’s overall rating. Previously the company used an unweighted average to calculate ratings."

24/7 Wall Street has a piece noting that in May, Amazon "posted 182 million unique visitors, fourth among all sites in the United States. Wal-Mart Stores Inc., the world’s largest retailer, had an online unique audience of 86 million."

This disparity in figures, the analysis suggests shows "the relative failure Wal-Mart has had as it tries to leverage its $485 billion in global annual revenue and 11,000 stores into an Internet presence that comes close to Amazon’s. Wal-Mart management knows as well as anyone that brick-and-mortar retail has passed its best years and cannot carry the price of employees and the costs of physical stores indefinitely. It is part of a world in which cars will not need drivers and groceries will be delivered by drones. Unfortunately, Wal-Mart’s current online revenue is barely $20 billion, or about 5% of the retailer’s total sales."
KC's View:
I was with this story right up until it said that "brick-and-mortar retail has passed its best years." I just think that's an outlandishly absurd thing to say ... because we simply don't know that.

I certainly would never argue that. It is enough to say that brick-and-mortar is facing a new kind of competition that will prove irresistible to some customers some of the time, and could take a bit out of brick-and-mortar sales. How big that bite will be is hard to calculate, and to some extent it depends on how traditional stores react, adapt, and even use online to bait the hook for the physical store.

But past its best years? I'm not at all sure that's true.