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"15 Signs Amazon Is Killing Walmart"
by Epic Economist
"This crazy economy isn’t sparing anyone. Even the world’s largest retailer is feeling the heat, and this suggests that soon Walmart may lose its coveted position as an industry leader to the online retail giant Amazon. Despite being the largest brick-and-mortar retailer and the largest employer in the U.S., Walmart’s business model is getting obsolete and causing some severe profit losses for the superstore chain that operates on paper-thin margins. Whereas Amazon’s online operations allow the e-commerce retailer to spend significantly less on real estate and also provide a clearer picture of changing consumer habits, which results in faster market adaptation, fewer expenses, and higher profit margins – all that without compromising pricing and providing great deals for their customers. That’s probably why Amazon’s sales are rising almost three times faster than Walmart’s.
While Walmart has hardened its lock on brick-and-mortar stores and groceries, shopping online is growing significantly faster, and Amazon captures 41 cents of every dollar spent online in the United States, according to eMarketer. The e-commerce retailer is rising exponentially because it lets marketplace sellers list their products alongside items it buys and resells itself. That greatly expands the selection of items and Amazon’s market presence. Wall Street analysts estimated how much customers spend on Amazon, regardless of whether it comes from Amazon’s inventory or a seller’s, and they found that people spent more than $610 billion on Amazon over the 12 months ending in June. While Walmart on posted sales of $566 billion for the 12 months ending in July.
And even though the latest stock market downturn led Amazon’s stocks to plummet, the losses faced by Walmart this year were far greater. To make things worse, as the brick-and-mortar retailer continues to struggle to boost its revenue back up, investors are still seeing its shares as a no-buy right now. Many pieces of evidence show that the tables are turning, and the end of Walmart’s retail supremacy may be closer than we think.
The competition between the two retail titans will only intensify as they attempt to keep up with each other. It's clear that Amazon is already outpacing Walmart in many areas, including profit margins, customer satisfaction ratings, and overall sales growth. In fact, one market research study found that Amazon is on track to overtake its competitor in terms of gross merchandise value within less than three years. A study from Edge by Ascential estimated that Amazon's gross merchandise value will reach $631.6 billion by 2025, a compound annual growth rate of 14% between 2020 and 2025. That means that the digitally native powerhouse is set to eclipse Walmart as the largest retailer in the United States. Walmart's gross merchandise value is slated to rise to $523.3 billion by 2025, which means its annual growth rate will be of mere 3.9%. The report also found that 29% of total chain retail sales will come from e-commerce by 2025 and that online sales in the US alone will increase by over $1 trillion by then.
With its commitment to providing affordable goods for its customers, it looks like the e-commerce giant is setting itself up to become the one to beat in the retail industry. Today, we compiled some major signs that prove that Amazon is quietly overthrowing Walmart."
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