Amazon Accounts for over 43% of US Online Retail: [The Amazon Effect]

Ah that time of year after the Holiday's, when our bank accounts took a hit, and we begin the grind all over again. If you did any online Holiday shopping, you most likely used Amazon. Amazon has revolutionized E-commerce and changed the rules of the game.

Yes, Amazon accounts for over ~43% of US Online Retail, and Accounts for ~53% of the ecommerce growth in 2016. Think about that for a minute

Amazon was founded in 1994, so in less than 25 years Jeff Bezos has created and destroyed entire industries. All the while becoming the richest man in the world, in less than half the time it took Bill Gates to acquire his fortune.

More Facts About Amazon

• As of 2015, there are 304 million active accounts on Amazon. To put this in perspective, there are only 323 Million people in the United State.
• The average non-Prime Amazon user spends $625 a year. Prime members may spend twice as much — or more.
• Nearly half of web shoppers go directly to Amazon for product searches.

While Amazon hails as a lifesaver for the cost-saving consumer, and 'Prime perks,' the overall retail market continues to suffer.

Grocer Industry

Take a look at the Whole-Foods Acquisition in 2016. Yes, WholeFoods had been struggling for some time, and it was the perfect opportunity for Amazon to seriously get in the grocer game.

Ok.. so we can buy cheaper foods at WholeFoods with a Prime account, but what does this say about overall industry trends? When Amazon decides to enter an industry, the other industry leaders cannot compete because they lack the supply-chain and information technology infrastructures that Amazon's algorithms, automation, and warehouses run on. Sounds like a rigged game, which is no fun for anyone.

What About Pharmaceuticals?

Amazon recently obtained wholesale pharmacy licenses in over 13 states. Even though I despise monopolistic-pharmaceutical companies that withhold intellectual property rights for far too long which hinders actual R&D progress; we need to look at the bigger Amazon picture.

"Size and scale-wise, they can disrupt anywhere they want to disrupt, said Chip Davis, president of the Association for Accessible Medicines."

Amazon's Great, but Buyer Beware

It is estimated that by 2020, online consumer spending is estimated to double. Of course this is a direct result from Amazon, but what is stopping them from merging and acquiring footholds in every industry? Just because they were the first to capitalize on streamlining supply-chain information technology, shouldn't mean they have a complete monopoly over all competing industries.

However, there is some light being shed by big brother - Walmart. Walmart has been losing money to Amazon's online Ecommerce platform for about a decade. Now, Walmart wants a piece of the pie and are doing everything they can to transform their online and in-store shopping experience. With the acquisition of Bonobos and online pick-up, they are quickly revamping their competitive advantages, but they've got a long ways to go.

Why is Amazon Meeting With the Pentagon

Call to Action

Understand that competition is good for the consumer. As companies compete with one another, their only goal is providing value to their consumers. We need to be cognizant of Amazon's rate of growth over the next couple of years.

Thanks for reading!

Sources:

https://www.bloomberg.com/news/articles/2017-10-26/drug-wholesalers-slump-after-amazon-com-obtains-state-licenses

http://www.businessinsider.com/amazon-accounts-for-43-of-us-online-retail-sales-2017-2

https://www.sellerlabs.com/blog/10-amazon-statistics-will-shock-every-seller/

https://www.census.gov/quickfacts/fact/table/US/PST045216