Will Amazon catch Wal-Mart by 2017?
April 17, 2012 11:37 AM
The world’s largest online-only retailer may soon catch up with the world’s largest retail chain, Wal-Mart Stores Inc., in non-grocery sales, predicts Scot Wingo, CEO of e-commerce services provider ChannelAdvisor Corp., whose services include helping retailers sell on such online marketplaces as Amazon and eBay.
By 2017, Amazon.com Inc. will reach $200 billion in annual sales, Wingo predicts, which is in line with Wal-Mart’s fiscal 2012 sales of non-grocery items. Wal-Mart generated sales of $444 billion in fiscal 2012 sales, up 5.9% from the prior year, and 54% of those sales came from groceries, leaving non-grocery sales at $204 billion. Amazon reported $48 billion in sales in 2011, up 41% from the year before. For Amazon to reach $200 billion in sales in 2017 the e-retailer would have to grow by 27% each year to 2017, well below its growth of recent years.
“We’re coming down to a two-horse race,” Wingo said last night at the opening session of the annual ChannelAdvisor Catalyst conference in Las Vegas.
Wingo pointed to the 120 to 150 fulfillment centers Amazon has said it plans to build over the next several years, which could make it easier for the retailer to up its already fast shipping times to 24 hours or same day for Amazon Prime members. Prime members pay Amazon $79 per year and get free two-day shipping on all items, and other perks, including free access to the retailer’s streaming video content.
“At some point, there may not even be need for UPS or other shipping services for Amazon,” he said. “With that large of a footprint, they could become their own shipping carrier. They are going to raise the customer experience to levels we can’t imagine today.”
Amazon’s growth is benefiting retailers that sell on the Amazon.com marketplace is also growing, Wingo says. Amazon sales for ChannelAdvisors’ 3,000 clients over the last year have grown anywhere from 41% to 85% on a monthly basis over the prior year.
Sales on the eBay marketplace have been tracking anywhere from 5% to 22% higher than last year,, ChannelAdvisor says.
ChannelAdvisor also announced today it is adding support for several newer online marketplaces, including Sears.com, Newegg.com, BestBuy.com and OneStopPlus.com.
For Newegg.com, a partnership with ChannelAdvisor makes sense, as Newegg is looking to dramatically expand its marketplace, which it launched in 2010, by adding new products and more sellers, says CEO Bob Bellack.
Sales on Newegg.com’s marketplace were up 300% in 2011, its second full year in operation, and the retailer expects to double that growth in 2012. Depending on the product category, Newegg takes around a 9% commission on marketplace sales, Bellack says.
“We are in many of the top categories already like consumer electronics, jewelry, home improvement and pet supplies,” Bellack says. “But we are looking to expand in a lot of these areas. The automotive category is one we can do a lot better in.” ChannelAdvisor has a large segment of clients that sell automotive parts and accessories, and this is one of the fastest-growing areas of the company’s business, says ChannelAdvisor president and chief operating officer David Spitz.
Newegg Inc. is No. 12 in the Internet Retailer Top 500 Guide. Amazon is No. 1; Sears Holdings Corp. is No. 7; Best Buy Co. is No. 12 and OneStopPlus.com is the plus-sized women’s apparel brand of Redcats USA, No. 33.
Joel Anderson, president and CEO of Walmart.com, U.S., will be a featured speaker at the Internet Retailer Conference & Exhibition 2012 in June, offering a presentation on “Creating Innovation Through the Next Generation of Retail.” Wingo will speak in a session entitled "Interest in Pinterest: How the social site drives retail traffic."