Clash of the retail titans

July 25, 2012 Written by NetSphere Category: eCommerce
Clash of the retail titans

From Florida oranges to Japanese beetle traps, Amazon nearly has it all. With at least 160,000,000 products, the online retailer literally has everything plus the kitchen sink. Beyond the vast array of stuff to buy, Amazon also offers free shipping, product reviews, shopper forums, daily deals, web services, sponsored links and job boards. The list goes on.

What this all adds up to is the biggest and fastest-growing online retailer out there. Put it head to head with the world’s biggest brick-and-mortar retailer – Wal-Mart – and its numbers look even more impressive.

“In the last 10 years, Wal-Mart grew at a compound annual growth rate (CAGR) of 8.24%,” explains Jack Love, publisher of, in his recent publisher’s letter. “Amazon, by comparison, has grown at a 31.4% CAGR for the past 10 years – almost four times as fast as Wal-Mart.”

Love goes on, however, to remind readers that Wal-Mart is growing from a much larger base. It has, after all, been a public company for about 30 years longer than Amazon. The year before it went public in 1970, it generated total sales of $31 million. In the same scenario, in 1997, Amazon had reported previous-year sales of only $16 million. The real growth is seen in the 15 years that took place after.

“At the end of its first 15 years as a public company, Wal-Mart had stunned the retailing world by generating sales of $6.4 billion – easily the fastest growth rate ever recorded by a retail chain,” Love continues. “But it pales in comparison to Amazon’s growth in its first 15 years. During that period, Amazon grew from a standing start to $48 billion in annual sales – fully 7.5 times the size Wal-Mart reached during its first 15 years as a public company.”

Taking the companies’ growth rates into account, reasonable projections have Amazon overtaking Wal-Mart in 2023, just 11 years down the road. But what does this mean, other than the fact that both companies are raking it in hand over fist?

Perhaps it’s as simple as understanding society’s new approach to shopping. Love stresses that Wal-Mart must make online retailing its top priority, “because stores are not the path to growth in retailing in the 21st Century.”

So with that knowledge, will you be inspired to make it a priority for your small business, too?

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Abbe Miller is the marketing manager at NetSphere Strategies, located just outside Chicago. NetSphere Strategies is a boutique eCommerce company positioned to help businesses transform their online presence by providing a full complement of services that starts with our strategic consulting and creative design teams, then continues with building innovative solutions and providing ongoing post-project support.