retail news in context, analysis with attitude

• While Amazon is making a big deal of the fact that it is improving its Prime offering so that it will now include one-day delivery rather than two-day delivery, CNBC writes that “Amazon is already capable of offering same-day and next-day delivery to 72% of the total U.S. population, including almost all of the households (95% or more) in 16 of the wealthiest and most populated states and Washington, D.C., according to a report published in March by RBC Capital Markets.”

That report says that “while store-level distribution is still the fastest way for a consumer to acquire a product, Amazon’s continued rollout of same-day and next-day delivery capabilities continues to reduce that historical competitive barrier and represents a growing risk to retailers who are too often fighting yesterday’s (2-day) delivery wars.”


Business Insider writes that while “Amazon has claimed several times that it is only responsible for 4% of US retail sales, making it not quite as large as some may think,” but “to think 4% of US retail is insignificant ignores a major trend in shopping, and it relies on the consumer's ignorance of how retail works to have impact.”

The goal behind Amazon’s claims is to reduce regulatory and political focus on its innovations and growth. The story notes that “Amazon does get a lot of attention due to myriad factors: a hugely expensive stock, a market cap that has hit records, an attitude toward category expansion that leaves no stone unturned, the second-largest workforce in the US, and a relentless release of highly complex consumer and enterprise technology.”

Here’s how Business Insider puts Amazon in context:

“Online sales grew about 14.2% in 2018, while the rest of retail grew only about 4%. On a long enough timeline, it's not hard to see online sales reaching parity with other sales or even overtaking them. Online shopping's share of all retail sales has grown from 8.9% in 2017 to 9.7% in 2018.
Amazon's core competency is online shopping, and growth for that is way outpacing the rest of retail. Nearly 50% of the nation's online sales will be claimed by Amazon this year, according to an estimate by EMarketer.
In fact, e-commerce was responsible for 51.9% of all retail growth for the year, according to analysis by Internet Retailer. And if Amazon took about half of all retail sales, it's not hard to imagine which portion of retail growth is simply Amazon's growth. Amazon's strength is perfectly in line with where retail dollars are flowing like a river.”

A river that threatens to swamp many of the businesses in its path.
KC's View: