There’s a lot of debate over whether this consolidation is a good thing. I guess it depends on your viewpoint. It’s good for consumers, certainly. It’s not necessarily good for other businesses.
Regardless, it’s the way things are going. And the Internet is pushing it even more. Talk about all in one place—Internet retailers can stock virtually anything and not worry about an actual retail space.
Right now, Amazon is on the way to becoming king. And it’s interesting how the company is doing it. A new study by William Blair & Co. compared prices, merchandising overlap and purchasing trends for 24 of the biggest retailers versus Amazon.
The study found that Amazon had 60 percent of the items that the 24 retailers had (22 of which had retail space). Those items were on average 11 percent lower in cost.
Because Amazon is an online store, taxes don’t usually figure in, although some states are trying to change that.
Shipping factors in, but only on single-item purchases for the most part. And because consumers tend to buy multiple items to counteract shipping charges, Amazon still comes out on top, especially on items over $20.
What this all means is that Amazon is threatening these big retailers. And because it offers just about anything you can find, it’s doing so across a big spectrum of the consumer market.
Again, bad for those retailers but good for consumers. If you’ve ever shopped online, you know the convenience.
And there is some irony to Amazon pricing out Walmart and Target, which have done the same for mom-and-pop retail shops for years.