An Amazon Statistic and the Word All

July 14, 2018

I read “Amazon’s Share of the US E Commerce Market Is Now 49% or 5% of All Retail Spend.” The idea of “all” is reassuring. One does not have to worry about precision. All means all, right. Cantor struggled with his view of all. That worry does not trouble the expert writing this article.

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Setting aside word choice, the factoid is semi interesting. Amazon has, according to this source, about half of the e commerce market in the US. Now the sample has to ask people who own a computing device, are able to get online, and who have some method for making a digital payment. If one considers what percentage of the US population checks these boxes, the “all” becomes a subset of the US population. The reason check cashing services exist pivots on the individuals who do not have a banking relationship either directly or via the mostly available prepaid credit cards. Using these prepaid credit cards can be interesting.

Let’s assume that Amazon does have a big chunk of the US e commerce market. The write up suggests that Amazon is heading toward a tipping point. The idea, I think, is that the “all” really will mean every nickel and dime spent online for “retail products.” The idea that Amazon’s growth is surprising strikes me as interesting. The key metric is the rate of change between each major financial milestone. At one time, Google was smoking along. Has Amazon’s growth been chugging along with a nifty slope between time and financial data (remember those?)

An outfit called eMarketer provides data which illustrates how Amazon is making revenue in clothing, beauty items, and groceries.

The only problem I have is that Amazon’s online success is old news. Not far from our log cabin in rural Kentucky, Wal-Mart closed three of its retail outlets. I think that Amazon’s success in e commerce was a contributing factor. In some demographic segments, Amazon’s share of the US retail market is nosing toward 80 percent. Even in rural Kentucky, our rescue French bulldog can be run over by one of the six or seven Amazon deliveries each day unless we are on our toes.

So what?

  • Amazon’s tipping point was reached a couple of years ago? Amazon is now just running plays from its 20 year old playbook. We’re into déjà vu territory.
  • Amazon’s e commerce system is part of a slightly more sophisticated online store. I think it may be helpful for some whiz kid analysts to think about Oracle’s data marketplace and ask, “What does that have in common with Amazon’s retail business?”
  • The notion of “all” is not a helpful way to explain what Amazon has achieved. eMarketer like many other professionals think about consumer products. Big market indeed. There are other ways to look at Amazon’s platform.

Why are these questions important? If Amazon is going to generate enough revenue to double or triple its revenue, it will have to do more than sell T shirts, avocados, and vinyl records.

Wal-Mart’s “Amazon disease” is now spreading to other markets. The “all” misleads when used without a more informed context.

Stephen E Arnold, July 14, 2018


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