Amazon.com Inc. (NASDAQ: AMZN) forecast it could post sales up as much as 25% in the current quarter which would take revenue for the period to $36.75 billion. If so, its ability to trounce the balance of the retail industry during the holidays will grow sharply again.
The National Retail Federation forecast holiday sales overall would be weak this year at 3.7% to $630.5 billion. That compares to a 10-year average of 2.5% but must still be a disappointment to large retailers, the same-store sales of which have recently risen at a rate little more than low single digits, or even dropped for some of the largest companies in the sector.
Amazon will have won not only because it has the equivalent of its own mall with millions and millions of products. It has leveraged its own products and services to get and hold customers. Other retailers cannot match its line of consumer electronics, which include its Kindle fireTV, fireTVStick and Fire HD laptops. These products compete much more with Apple Inc. (NASDAQ: AAPL) than Wal-Mart Stores Inc. (NYSE: WMT).
Amazon has also crafted a service that tethers millions of customers to it. Its Prime, a combination of free shipping, movies, music and file storage, is also unlike anything other retailers can offer. The free shipping portion of the service competes with brick-and-mortar retailers. The music service once again has its eyes on Apple’s similar offerings.
Amazon sites are currently the fourth most visited in American, at 188 million unique visitors in September, according to online research firm comScore. That puts it well ahead of the next most visited retail sites, which are Wal-Mart’s. They had 89 million in the same month. The only other retailer among the top 50, according to comScore, was Target Corp. (NYSE: TGT) at 59 million. The size advantage is large enough so that these large retailers cannot close the gap.
If Amazon’s sales rise 25% in the current quarter, the company is well on its way toward being a $120 billion a year operation. The battered retailer industry cannot afford to have such a dominant competitor.
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