A Reminder of Amazon's Retail Strength
Nov 23rd 2012 6:38AM
Once a month, research firm Comscore releases a list of the 50 largest websites in the United States by traffic. Month after month, even year after year, Amazon.com Inc. (NASDAQ: AMZN) tops the list of e-commerce sites. Its lead over the next few retail sites is so large that it is impossible to imagine that Amazon will ever give up its position. Amazon has crushed the bricks-and-mortar world and continues to do so.
For October, unique visits to Amazon sites came to 108.7 million. Wal-Mart Stores Inc. (NYSE: WMT) sites were a distant second at 40.7 million. Target Corp. (NYSE: TGT) was at the bottom of the list of 50 with 26 million hits, which means no other retailer made the list.
The data are a reminder of why analysts are so pessimistic about the long-term prospects of crippled retailers like JCPenney Co. Inc. (NYSE: JCP), Best Buy Co. Inc. (NYSE: BBY) and Barnes & Noble Inc. (NYSE: BKS). These companies continue to fight to keep foot traffic to their stores. As it erodes, none can count on e-commerce traffic to take up that slack. JCPenney's e-commerce revenue fell by more than a third in the most recent quarter, compared with the same one a year ago. The situation may be less bad for other large retailers, but JCPenney shows that, even for a company with a well-known brand, improvement in e-commerce is nearly impossible.
Then there are the retailers in a no-man's land. These continue to do relatively well with store sales, but that have not gotten enough long-term leverage in the online world. Macy's Inc. (NYSE: M) is among them. So are Costco Wholesale Corp. (NASDAQ: COST) and Gap Inc. (NYSE: GPS). Each has posted strong same-store sales recently. However, the relentless advance of e-commerce will overwhelm them if they cannot take market share from Amazon.
Amazon established itself some time ago as the first stop for many online shoppers. With its brand and the customers it has gained already, that position will not change, and its competition will not gain on it.
Douglas A. McIntyre
Filed under: 24/7 Wall St. Wire, Internet, Retail Tagged: AMZN, BBY, BKS, COST, featured, GPS, M, TGT, WMT