retaildive (source) :
- As online sales in the U.S. grow by 15.8% to $452.76 billion by the end of this year, Amazon is poised to capture 43.5% (or $196.75 billion) of that, according to a study from eMarketer emailed to Retail Dive.
- That’s close to 4% of all retail sales in the U.S., according to eMarketer’s research, which also found that e-commerce overall will account for 9% of all U.S. retail sales by the end of 2017.
- Amazon’s nearest rivals are quite far behind. No. 2 eBay will see its e-commerce sales grow to $30.66 billion by the end of this year, but its share of total e-commerce sales will drop to 6.8%, according to eMarketer’s estimates. The firm estimates Walmart’s e-commerce sales will rise 46.8% to $16.21 billion by year’s end — but they will remain just 3.6% of U.S. online retail and 0.3% of total retail, despite Walmart’s gargantuan effort to boost its online operations.
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After two decades of adding new categories and features to its platform, Amazon is dominating e-commerce. In fact, just 10 companies — Apple, The Home Depot, Best Buy, Macy’s, Wayfair, Costco and QVC, in addition to Amazon, eBay and Walmart — account for nearly two-thirds of overall U.S. e-commerce sales.
Indeed, even as legacy retailers have worked to build out their e-commerce and multi-channel operations, online retail remains below 10% of all retail sales, according to eMarketer and to the U.S. Commerce Department’s research, which pegged it at 8.4% earlier this year.
The relative narrowness of online retail may be why Amazon is expanding its brick-and-mortar play — opening more bookstores and buying grocery chain Whole Foods this year, along with pop-up stores and a few convenience stores. There is undeniable synergy between physical stores and online sales, with brick-and-mortar helping to boost e-commerce thanks to services like in-store pickup of online orders, as well as the marketing value of a physical location in a given area.
That leaves eBay at a considerable disadvantage, and the site “has stagnant growth and is losing share” despite its second-place ranking, eMarketer said. Amazon’s sales were more six times eBay’s, according to eMarketer.
The expense of e-commerce retail also has yet to be well rationalized by most retailers. That includes Amazon, which burns billions of dollars a year in shipping costs but, unlike rivals, has a lucrative cloud services business that delivers huge profits. Meanwhile, its retail operation, even after 20 years, isn’t very profitable relative to its sales.
Analysts are increasingly taking into account the damage the shift to e-commerce is inflicting on retail margins, however. In addition to tepid sales overall, “the shift to the variable-cost model of e-commerce from the fixed-cost store model continues to suppress operating margins for the sector,” Moody’s Investors Services retail analysts said in a May report on U.S. department stores emailed to Retail Dive.
The variable cost model will undermine digital growth at some point, according to retail analyst Nick Egelanian, president of retail development consultants SiteWorks International. “When shipping costs are fully allocated to the consumer some time in the future, we will see the rate of internet sales growth sharply decline,” he said in an email to Retail Dive earlier this year.