No Matter What Wall Street Says, Amazon Is Still Surging
Business news outlets last week erred on the side of painting a disappointing picture for Amazon amid the release of its Q4 earnings report and news the e-etailer came up slightly short on revenue vs. Wall Street analysts’ predictions.
What received far less attention, however, was the release of a new study suggesting that Amazon is not only maintaining, but increasing its sizeable lead over its e-commerce competitors.
Slice Intelligence found that 43 percent of online sales in the U.S. in 2016 went through Amazon.
While that’s staggering in and of itself, more impressively, the study found that the site accounted for 53 cents of every $1 of e-commerce growth in 2016.
To translate: Amazon’s growth in 2016 outpaced Walmart, Best Buy, Wayfair, Kohl’s, Target, and every other e-retailer in the U.S. combined.
So, while Amazon is already well ahead of its peers, it is actually increasing its lead on the competition. And that’s not by a lack of effort on behalf of the others.
Walmart is doubling- and tripling-down on e-commerce, recently appointing the founder of its newly-acquired Jet.com to head up their entire e-commerce division. With new leadership and a near-endless supply of resources at its disposal, time will tell if Walmart can gain ground, or if Amazon will continue this remarkable trend.
One would imagine something has to give. One or two missteps -- or a couple innovative steps by the competition -- and Amazon’s lead is bound to slip at some point.
However, right now Amazon has provided no signs of relenting in its course to stay multiple steps ahead of everyone else. And every time another retailer makes a move, Amazon is well onto the next journey.
For instance, Walmart announced this week it will begin offering free two-day shipping on orders of $35 or more, without a membership in its ShippingPass program (similar to Amazon’s Prime program).
It’s a positive step for Walmart. The retailer can now boast it now offers the industry-standard two-day turnaround without mandating a membership purchase by the customer. As of now, that’s one feature that sets it apart from Amazon.
Yet users of Amazon Prime are already entrenched in (and many are likely already addicted to) its Amazon Prime Now program, offering a substantially-more-eye-opening free two-hour delivery with a reasonable minimum order value.
Getting Amazon loyalists to consider a switchover to Walmart is a longshot, even if it does potentially save them a considerable membership fee.
Wall Street is tasked with drawing its conclusions based on what’s important to Amazon’s investors and the trading community as a whole, but it’s important the public at large not misinterpret a setback in the nuanced financial world as a sign of something more widespread.
Within the world of e-commerce, the numbers are telling a different, far more typical story.
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