Home Technology Amazon overtakes Walmart as No. 1 retailer by '24; the latter's store-based...

Amazon overtakes Walmart as No. 1 retailer by ’24; the latter’s store-based tack is to blame

According to a new report from Ascential, Amazon is expected to surpass Walmart as the No. 1 retailer in the US by 2024. That news isn’t surprising to retail viewers, given that Walmart had bet on a store-based approach years ago. While that made sense at the time, consumers have changed their habits — and Walmart is about to pay the price.

The giant company — which is today not only the largest retailer in the US, but also the largest company in every category — had little choice at the time. With so much of its revenue coming from its 4,735 brick and mortar stores, e-commerce was seen as a way to increase, but never replace, that revenue. (Walmart today operates 10,585 stores and employs some 2.3 million employees.)

More often than not, the retailer has seen e-commerce as an added convenience for existing customers, making minimal effort to reach further. Compare that approach to Amazon, which took the opposite direction. Despite buying the Whole Foods supermarket chain and launching several dozen Amazon Go stores, Amazon still considers brick-and-mortar stores an afterthought. The business model is based on online shopping.

Over the past 10 years, U.S. consumers have gradually embraced e-commerce more each year — a trend that only accelerated when the COVID-19 pandemic broke out in 2020. Research firm Statista found that the e-commerce percentage of U.S. retail sales rose from 5.8% in 2013 to 16.1% today — and is projected to be 21.9% by 2025. In terms of the pandemic impact, the percentage of retail sales is online shopping increased from 11.1% in 2019 to 14.2% in 2020 – the highest annualized percentage increase in recent years.

“As the growth of online retailers has been accelerated by the pandemic, Amazon will continue to grow fastest in the top 10, growing at a CAGR of 11.7% between 2021-2026,” the Ascential report said, noting that Amazon is moving toward expected to add $294 billion in sales over the five-year period ending 2026, overtaking Walmart as the largest retailer in the market.

Ascential predicts that the top three retailers in the US will be Amazon, Walmart and Costco, with 14.9%, 12.7% and 4.4% of the market share, respectively.

The term “etailer” has fallen out of fashion in recent years, as the distinction between online and in-store sales is no longer relevant. But not so with Amazon and Walmart. They keep those awards nicely separated for very different reasons.

As if living in parallel universes, both retailers use in-store and online in completely opposite ways. Walmart uses online to bolster its retail position. Amazon uses in-store tactics to bolster its online app and site. Amazon Go locations are less about generating substantial revenue and more about showcasing technology that makes purchases frictionless. And Whole Foods offers many Amazon buyers the opportunity to return items purchased online.

To be clear, it’s not exactly a disaster to drop a lock on becoming the second largest retailer in the United States. Walmart’s real estate footprint in the US and its overall operations worldwide mean it’s not going anywhere for an extraordinarily long time.

But this change makes it clear that Amazon is not only a market leader, but is setting the tone for e-commerce business everywhere.

Copyright © 2022 IDG Communications, Inc.

RELATED ARTICLES

Trump-Backed Candidate Who Said Roe Ruling Was ‘Victory For White Life’ Wins Illinois Primary

A right-wing freshman Republican congresswoman who cited the Supreme Court’s decision to nullify Roe v Wade’s victory for “white life” defeated her more established...

Canberra 2021 census quiz: take the test to see how much you know | The Canberra Times

We’ve compiled 15 questions from the results to see how well you know the city and area. And we didn’t make it easy...

Putin taunts West with chilling threat as it publishes Pentagon coordinates | World | News

The threat was raised at the start of a NATO summit in Spain, where allies will gather to condemn Russia’s actions in Ukraine. ...

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular

Trump-Backed Candidate Who Said Roe Ruling Was ‘Victory For White Life’ Wins Illinois Primary

A right-wing freshman Republican congresswoman who cited the Supreme Court’s decision to nullify Roe v Wade’s victory for “white life” defeated her more established...

Canberra 2021 census quiz: take the test to see how much you know | The Canberra Times

We’ve compiled 15 questions from the results to see how well you know the city and area. And we didn’t make it easy...

Putin taunts West with chilling threat as it publishes Pentagon coordinates | World | News

The threat was raised at the start of a NATO summit in Spain, where allies will gather to condemn Russia’s actions in Ukraine. ...

Optical illusion: only 2 percent see four women in this image

Social media users are losing their minds over this mind-boggling visual puzzle that only 2 percent of people are said to be able to...