Monday, August 6, 2012

Amazon to surpass Wal-Mart?

Some retail experts are predicting Amazon will surpass Walmart as the largest retailer by 2020.  According to yahoo finance, Amazon reached $54 billion in revenue last year vs. Wal-Mart netting $455 billion in revenue - so its anything but a sure bet.

However, there's no doubt that Amazon has dramatically changed the way that many American's shop.  On big ticket items, Amazon stole the show by allowing consumer to skirt paying sales tax - although that advantage is ending shortly in many states.  Then there was Amazon Prime, free 2 day shipping on anything with an annual $50 membership.  Rumor has it, Amazon's next big game changer is going to be same day shipping on most items.  Think about that revolution.  Amazon is without a doubt changing the retail equation and a shift in the balance of power is already underway and their loyal army of shoppers is growing especially with millennials.

Retail giants have risen to dominance only to have fallen in the past (e.g., Sears), so I don't doubt the shift and the very really possibility that Amazon could overtake Wal-Mart in the next 8 years. Still, I for one think there will always be a major role for traditional brick and mortar stores.  Americans are consumers, they like to shop, they like to browse, they like to stumble on surprises and find new items they never knew they needed.  So, it all comes down to how does Wal-Mart react to the obvious shift in momentum.  Do they stay the course and bunker down or adapt and make they're customer experience irreplaceable?  If so they better get started today because the customer experience is a detriment today

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