There is a growing amount of press about the rise of Amazon and what it means to the economy in general and for Wal-Mart in particular. It makes you wonder what the real story is. After all, Wal-Mart has had an enormous impact on the toy industry. Any contender could make a difference in all of our fortunes. That is why I am going to be tracking these companies over the coming months.
In order to get started, I wanted to get a better idea of where the two companies stood relative to each other. So, I did some investigating and found a great piece on Wal-Mart and Amazon entitled "The Retail Showdown of the 21st Century" that provides a great direct comparison of the two companies. Here is some of what I discovered:
Amazon is not doing Wal-Mart’s revenue numbers…yet (some predict Amazon to pass Wal-Mart by 2024). Wal-Mart still rules in terms of revenue with $408 billion in annual sales compared to $34 billion for Amazon.
While Wal-Mart is the revenue leader by a mile, its lead in weekly customer counts is not as insurmountable. 200 million consumers visit Wal-Mart every week compared to 137 million for Amazon. That means that while Amazon is currently doing approximately 8% of Wal-Mart’s volume, its customer base is a surprising 68.5%.
That means that Wal-Mart shoppers are buying more from Wal-Mart than Amazon. But what if Amazon can increase its 0cnsumer’s market basket? It wouldn’t take long to make up the difference.
That really hits home when you consider this: Amazon’s number one item in 2010 was the Kindle which sold for $139 a pop. What was Wal-Mart’s number one item in 2010; it was the banana with an average price of 45 cents?
Wal-Mart is progressively relying on fruits and vegetables to maintain its volume figures. If Amazon increases its ability to sell higher value goods it will mean a seismic shift in the retail market. One that Wal-Mart, Target and all of us will feel.
But who is shopping at these stores. That in my next posting.