One statistic reveals how the retail apocalypse is ripping the industry apart

A worker inside an Amazon warehouse. Getty Images
  • Amazon is driving half of all growth in the retail industry.
  • As the ecommerce giant thrives, traditional retailers are struggling.
  • The “Amazon effect” is feeding into the retail apocalypse, as sales slump and stores close at retailers like Sears, Macy’s, and Toys R Us.

Amazon holds an incredibly over-sized place in the retail industry.

The ecommerce giant will drive half of all retail growth from 2016 to 2018, using next year’s estimated figures, according to a Morgan Stanley report.

The same report, released Wednesday, says that Amazon accounts for about 31% of all US ecommerce purchases.

Dead Mall
A deserted mall. Nicholas Eckhart

That’s an incredible portion for one company to control in a $US2.5 trillion industry.

In 2017, many retail giants are struggling. The so-called “Amazon effect” is threatening brick-and-mortar retailers like Macy’s, Sears, and JCPenney.

Some companies that have failed to measure up to Amazon on ecommerce have filed for bankruptcy this year, including Toys R Us, Radio Shack, and Wet Seal.

Others, like Sears, are scrambling to find solutions in the face of plummeting sales and stores closures. More than 6,400 store closures have been announced so far in 2017.

Retailers have been eager to try and debunk the “retail apocalypse” narrative, pointing to ecommerce sales and overall industry growth.

In 2016, US retail sales grew 1.4%, according to PricewaterhouseCoopers. Online sales dwarfed that of the overall industry, growing 10.1% in the same time period.

However, when a single company is responsible for half of overall growth, and even more in online sales, it’s time to stop pretending every company is benefiting. The retail apocalypse is in full force — and Amazon is only making it more deadly for many retailers.