Every big box retailer should be terrified by this one chart
Big box retailers got hammered in the market on Wednesday, after Macy's reported dismal earnings.
That followed news of Amazon's stock reaching an all-time high, underscoring the more secular shift we've been seeing in online shopping.
But the bullcase for Amazon and the broader e-commerce market shouldn't stop there.
As this chart by the financial research firm Pacific Crest shows, e-commerce is still only a tiny part of the overall retail industry, representing a mere 7.2% penetration rate. That means on average only 7 out of 100 retail customers are buying online.
In other words, there's a massive opportunity for online retailers, most notably Amazon, which has driven more than half of all US e-commerce growth last year, to win more share and generate more revenue.
Pacific Crest
The scarier part is that Amazon only gets about 25% of its total retail revenue from books and media, the most saturated e-commerce category. The rest of its sales comes from things like apparel, electronics, and home furnishings, categories that still remain vastly underserved, according to Pacific Crest's chart. Plus, Amazon's non-media sales is growing at a 30% clip year-over-year.
Perhaps, that explains why Cowen & Co. predicts Amazon will replace Macy's as the largest retailer in the US by next year.
Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.
- I spent $2,000 for 7 nights in a 179-square-foot room on one of the world's largest cruise ships. Take a look inside my cabin.
- One of the world's only 5-star airlines seems to be considering asking business-class passengers to bring their own cutlery
- Vodafone Idea FPO allotment – How to check allotment, GMP and more
- Indians can now get multiple entry Schengen visa with longer validity as EU eases norms
- Investing Guide: Building an aggressive portfolio with Special Situation Funds
- Markets climb in early trade on firm global trends; extend winning momentum to 3rd day running
- Impact of AI on Art and Creativity
- Reliance Industries quarterly profit stays flat; annual earnings hit record at ₹69,621 crore