Is Amazon becoming the Wal-Mart of the Web?

Is Amazon becoming the Wal-Mart of the web? That’s the question an important article in the September 20, 2009 New York Times asks. The article, entitled “Can Amazon be Wal-Mart of the Web?”

Consider this statement from the article:

Fifteen years after Jeffrey P. Bezos founded the company as an online bookstore; Amazon is set to cross a significant threshold. Sometime later this year, if current trends continue, worldwide sales of media products — the books, movies and music that Amazon started with — will be surpassed for the first time by sales of other merchandise on the site. (That transition already occurred this year in its North American business.)

In other words, Borders has gone from being a purveyor of books and media to a web based mass merchandiser. This has implications for every retailer, big and small.

The article quotes Scot Wingo, the chief executive of ChannelAdvisor. ChannelAdvisor consults with companies like Wal-Mart and J.C. Penney in selling via the web. Wingo is predicting that ecommerce is going to grow from 7% to 15% of all retail in the next ten years. Amazon is going to have a lot to do with that growth.

As I have said before, a bricks and mortar retailer must maintain enough store traffic and revenue to support the store’s infrastructure. If the traffic falls below that level the store will need to either be closed or downsized. 

This will ultimately mean fewer and smaller bricks and mortar stores with less staff on the floor. Not a pretty picture. Just as Wal-Mart changed the face of retailing, Amazon and the web are going to do the same. Stay tuned.