When the online audience heft of Amazon.com Inc. (NASDAQ: AMZN), eBay Inc. (NASDAQ: EBAY), Wal-Mart Stores Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT) are taken into account, it is clear how much of an uphill battle other large retail companies have to post much growth. The reality of e-commerce in the United States is that four companies have elbowed themselves to an unassailable lead. The balance of the industry faces a difficult future. There are only so many online customers to go around.
A review of comScore figures for December shows that Amazon had 121 million unique visitors, slightly below Facebook Inc. (NASDAQ: FB), and in fifth place among all Web destinations based on that measure. EBay had 78 million unique visitors, which put it into 13th place. Walmart had 52 million, which placed it well ahead of the media properties of Gannett Co. Inc. (NYSE: GCI) and popular social media firm Twitter. Target had 37.4 million unique visitors, just behind LinkedIn (NYSE: LNKD) and ESPN. Sears Holding Corp. (NASDAQ: SHLD) sites were near the bottom of the top 50 sites for December with 27.7 million.
Among the top 50 retailers in the United States by total revenue in 2011 were Walmart in first place and Target in third. High up on the same list is Best Buy Co. Inc. (NYSE: BBY), which many on Wall St. believe has been ruined by Amazon. Also near the top is J.C. Penney Co. Inc. (NYSE: JCP). Its earnings reports for the past two quarters show its e-commerce revenue actually has fallen sharply year over previous year. A retailer as badly off as J.C. Penney cannot afford that trend. Also near the top of the retailer list are department stores Macy’s Inc. (NYSE: M), Kohl’s Corp. (NYSE: KSS) and Nordstrom Inc. (NYSE: JWN). Each recently has posted good same-store sales improvements. But, in world in which more and more people buy online, or at least shop for prices, the success of those three retailers is already capped. The trend of retail habits continue to move relentlessly against them.
No retailer can compete online with the small number of companies that lead the field. For each of these, many struggling with e-commerce, their futures are already set.
Douglas A. McIntyre