People now spend more money at Amazon than at Walmart

SEATTLE – Amazon eclipsed Walmart to become the world’s largest retailer outside of China, according to business and industry data, a mi...

SEATTLE – Amazon eclipsed Walmart to become the world’s largest retailer outside of China, according to business and industry data, a milestone in the shift from physical to online shopping that has changed the the way people buy everything from Teddy Grahams to teddy bears.

Driven in part by increased demand during the pandemic, people spent more than $ 610 billion on Amazon in the 12 months ending in June, according to Wall Street estimates compiled by financial research firm FactSet . Walmart Tuesday posted sales of $ 566 billion for the 12 months ending in July.

Alibaba, the Chinese e-commerce giant, is the world’s number one seller. Neither Amazon nor Walmart is a dominant player in China.

Surpassing Walmart, Amazon has dethroned one of the most successful – and most feared – companies of decades. Walmart has come up with a thriving big box retail model that has kept costs as low as possible, lowering prices and defeating competitors.

But even with all this efficiency and power, the quest to dominate today’s retail environment is won on the internet. And no company has benefited better than Amazon. Indeed, the company’s delivery (many items hit the doorstep in a day or two) and a wide selection initially attracted customers to online shopping, and this made them buy more. since. It also made Jeff Bezos, the founder of the company, one of the richest people in the world.

“This is a historic moment,” said Juozas Kaziukenas, founder of Marketplace Pulse, a research firm. “Walmart has been around for so long, and now Amazon is offering a different model and replacing it as # 1.”

Wall Street companies expected this retail witness to change hands in the years to come. But the pandemic has accelerated the timeline as people trapped at home relied on deliveries. Walmart’s sales rose sharply during the pandemic, but they haven’t matched Amazon, which has added hundreds of new warehouses and hired around 500,000 workers since the start of last year.

Walmart sales rose $ 24 billion last year, the company said on Tuesday. Over the same period of time, the total value of everything people bought from Amazon increased by nearly $ 200 billion, analysts estimate.

Although the numbers are calculated differently, analysts regularly use them as a rough comparison. Knowing the total value of Walmart’s sales is straightforward, as almost all of them come from its own inventory and are disclosed publicly on a quarterly basis. But analysts need to calculate an estimate of the value of Amazon’s overall sales, because most of what people buy from its site are products owned and listed by outside merchants. The company only publicly declares the fees it takes on these transactions.

Amazon’s success came with closer scrutiny. And the company has started to receive many of the same complaints – about its treatment of workers and its impact on local and national economies – that Walmart has faced during its largest periods of expansion more than ten years ago. years.

“The big bad wolf is now Amazon,” said Barbara Kahn, professor of marketing at the Wharton School of Business at the University of Pennsylvania, who has written several books on retail.

Amazon and Walmart declined to comment.

Over the past century, very few companies could claim the title of the world’s largest retailer. The A. & P grocery chain. was such a force that antitrust authorities pursued it in the 1940s. Sears overtook A. & P. as the largest retailer in the early 1960s by targeting middle-class shoppers in the suburbs and expanding the department store model.

Then came Walmart.

In 1962, Sam Walton founded the retailer in small town Arkansas. Mr. Walton had “a real passion – some would say an obsession – to win,” he writes in his autobiography, and he sold a wide variety of goods at low prices, possibly including fresh food. But his real innovation was the construction of a vast logistics network that worked with such precision and efficiency that it crushed many competitors who could not compete.

By the 1990s, Walmart had overtaken Sears. And then it continued to grow, opening thousands of stores and acquiring other retailers around the world.

Just as Mr. Walton founded Walmart when Sears was ascendant, Mr. Bezos started Amazon in the early 1990s when Walmart was king.

Guru Hariharan, who worked at Amazon’s retail, said Amazon has eclipsed Walmart by playing a different game. Walmart has tightened its lockdown on physical and grocery stores. But online shopping is growing much faster than in physical stores, even though it only accounts for about one-seventh of retail sales in the United States. Amazon captures 41 cents on every dollar spent online in the United States, while Walmart takes just 7 cents, according to eMarketer.

“They have their own territory of which they are kings,” said Hariharan, who left Amazon and eventually founded CommerceIQ, which advises brands like Colgate and Kimberly-Clark on e-commerce.

Amazon has progressed in part because it opened its website to allow third-party sellers to list their products alongside items that Amazon buys and resells itself. This market has dramatically increased the assortment of items available. Almost two million sellers offer products on Amazon, and they represent 56% of items sold.

The market makes it harder to determine Amazon’s true influence in the retail industry. The business only captures and reports the fees it charges vendors to list, ship, and market their merchandise, not the total money that goes through its business. The model is more profitable, but produces less income.

“It makes Amazon look smaller,” Kaziukenas said. “They hide their reality. “

This has led analysts at investment banks like JP Morgan, BMO Capital Markets, and Cowen to estimate what is known as the “gross value of the commodity,” by calculating how much customers buy on Amazon, whether it comes from from Amazon or a seller’s inventory. Analysts make the estimates based on data released by the company, such as the revenue it collects from sellers and market share in total units sold, and their own research. FactSet compiles and averages the estimates.

In the past 12 months, Amazon reported total revenue of $ 390 billion. But total product sales, including transactions with third parties, have increased by almost 60%, analysts estimate.

Amazon did not regularly disclose its gross value of the commodity, but in 2019, in the face of antitrust pressure, Mr Bezos shared the measure – then $ 277 billion – for the first time to show that third-party sellers are growing faster than Amazon’s direct retail business. “Third party sellers kick us in the owners butt,” he wrote.

When Mr. Bezos testified in Congress last summer, he pointed to the size of Walmart as evidence of a competitive retail industry. “We compete with big, established players like Target, Costco, Kroger and, of course, Walmart,” he said, “a company more than double the size of Amazon” – presumably referring to Walmart revenue.

Walmart is still the largest private employer in the United States, with 1.6 million workers. And it sells more in the United States than Amazon, although JP Morgan estimates that Amazon will overtake Walmart in the United States next year.

During the pandemic, Walmart honed its ability to use its stores as mini-distribution centers, where shoppers drive to pick up their purchase ‘curbside’, a much cheaper way to process online orders than delivery. . On Tuesday, Walmart said it expects to generate $ 75 billion in total online sales this year. The company has stepped up efforts to create its own market, but the vast majority of its online sales still come from its own inventory, Kaziukenas said.

Edward Yruma, retail analyst and managing director of KeyBanc Capital Markets, said Amazon is only beginning to understand the reality of its size.

“Walmart is big, and they know it,” he said. Amazon has long played the role of the upstart, even as it has grown huge. This summer alone, when it already employed around 1.3 million people, it added a new principle of leadership that recognized responsibility for its ladder.

“We started in a garage,” begins the new principle, “but we are no longer there. “

Source Link



Africa,885,Americas,4263,Art & Culture,15587,Arts,6688,Arts & Design,1813,Asia,3482,Automobile,498,Baseball,723,Basketball,579,Books,4097,Business,5557,Celebrity,2633,Cricket,648,Crime,158,Cryptocurrency,1861,Dance,622,Defense,836,Diplomatic Relations,2496,Economy,1263,Editorial,260,Education,1380,Elections,308,Energy & Environment,3109,Entertainment,23270,Environment,3813,Europe,4421,Faith & Religion,235,Family & Life,817,Fashion & Style,3497,Finance,20919,Food & Drink,3969,Football,1170,Games,97,Gossip,10289,Health & Fitness,4318,Health Care,951,Hockey,237,Home & Garden,920,Humour,994,Latin America,49,Lifestyle,17912,Media,527,Middle East,1644,Movies,1914,Music,2841,Opinion,3595,Other,12591,Other Sports,5284,Political News,11324,Political Protests,2324,Politics,18262,Real Estate,2098,Relationship,106,Retail,3116,Science,2825,Science & Tech,10664,Soccer,303,Space & Cosmos,383,Sports,12848,Technology,3643,Tennis,659,Theater,1837,Transportation,313,Travel,2714,TV,3874,US,1073,US Sports,1481,Video News,3531,War & Conflict,1069,Weird News,998,World,17455,
Newsrust - US Top News: People now spend more money at Amazon than at Walmart
People now spend more money at Amazon than at Walmart
Newsrust - US Top News
Loaded All Posts Not found any posts VIEW ALL Readmore Reply Cancel reply Delete By Home PAGES POSTS View All RECOMMENDED FOR YOU LABEL ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS PREMIUM CONTENT IS LOCKED STEP 1: Share to a social network STEP 2: Click the link on your social network Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy Table of Content