Amazon’s Expansion is Killing American Retail

fedexVarious Amazon shipments in transit. (Credit- Bloomberg)

Gone are the days of early morning stampedes on Black Friday  As the holidays draw closer, business statistics reveal shopping trends from all across the country.  Marketing analysts indicate that a record $7.9 billion was spent by online shoppers on Thanksgiving and Black Friday alone, resulting in the largest digital shopping day of all time in the U.S.

Amazon.com received its highest web traffic all year, outselling virtually every other E-commerce service in the world. Surveys conducted by Forbes concluded that 58 million Americans shopped online while 51 million shopped in brick-and-mortar stores, with 65 million others shopping both online and in stores. The holiday shopping frenzy has steadily declined in intensity but statistics indicate no end in sight any time soon. Some of the hottest items selling globally include the new Amazon Echo Dot Alexa, Bluetooth speakers, and Apple Airpods.

airpods

 

 

 

Apple Airpods retailing for $159.00. (Credit – Apple)

 

However, in the excitement of cashing in on sales and other special discounts online, Americans often overlook another tragedy taking place in cities across the country. With the widespread use e-commerce, brick-and-mortar stores are suffering greatly. Shoppers are spending less and less time in stores resulting in extreme profit losses for a number of big name stores, namely Sears. In order to avoid total closure, Sears as well as many other retailers, cope with the loss of profits by closing a number of store locations.  This event is sometimes referred to as, “The Amazon Effect.”

sears.jpg

(Credit- Business Insider)

Despite the convenience e-commerce provides for the user, Amazon relies largely on temporary employees to handle shipments and other logistics. These jobs are expected to gradually be replaced by robots and other forms of automation, something Amazon repeatedly explores. Coupled with this, Amazon’s business model regarding package delivery threatens nearly 1 million U.S. Postal Service jobs. Traditional package delivery services are facing fierce competition from Amazon’s alternative shipping methods. In a precise combination of these tactics, Amazon is able to force their competitors into a marketing stranglehold, buying out the competition and growing stronger with each acquisition.

As retailers and shopping outlets struggle to keep up with Amazon, data analysts indicate that achieving an equilibrium between the two is highly unlikely. Projections indicate that Amazon’s global revenue could reach nearly 356 billion U.S. dollars in 2022. Concurrently, Credit Suisse, a major global financial services company, predicts that 25% of all actively operating malls could close by 2022.  Only time will tell what the future holds for big-box retailers and small businesses alike.

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