It's all over but the shouting. JPMorgan has declared that within a year, Amazon will pass Walmart to become the nation's largest retailer. And as of Q2 this year, Amazon has already leapfrogged Walmart to become the largest U.S. retailer of apparel and footwear.
Leading the way, of course, is Amazon's digital business. The company controls 40% of U.S. e-commerce overall. To illustrate how powerful Amazon is online, consider that the digital dreadnaught's online apparel and footwear sales are now SEVEN TIMES as large as its next nearest competitor in that category (Macy's). That's right, a relative market share in category of nearly 7.0.
And it's no secret that Amazon has been leveraging its digital dominance by pushing into bricks & mortar retail. From its acquisition of Whole Foods to its partnership with Kohl's to the launch of Amazon Go convenience shops and more recently Amazon Fresh grocery stores, Amazon is running hard at retail.
Making for Main Street
Given the expansionist, conquistador ethos of Bezos' company -- its founder now set on no less of a task than colonizing outer space -- it is not at all surprising that Amazon is looking to capture bricks & mortar market share back here on Earth.
After all, the so-called "Retailmageddon" of the past few years was never truly a thing. And as Amanda Mull recently elucidated in "The Atlantic," we earthlings actually like shopping in stores. So Amazon can sniff the upside opportunity in becoming a Main Street retailer, and will no doubt attack it like a bloodhound.
Doom for Department Stores?
Much has been written of late, especially since the pandemic, on the Death of the Department Store. Yet those prone to this vein of morbid catastrophizing make the same mistake as do the "Retailmageddon" hand-wringers: Confusing change and death, which are, ahem, not the same thing.
But as Mull notes in her perceptive piece, department stores solve multiple problems for shoppers and retailers alike. So while the ten-story downtown flagships and quarter-million square foot suburban behemoths of department store past may be fading into history, the concept of the department store itself need not, and in fact does not, face extinction.
Let It Go, Let It Go
There's a meme bouncing around the Internet that incorrectly attributes to Buddha the saying, "You only lose what you cling to." That this line's provenance is questionable doesn't invalidate its meaning: if you let go of the past and embrace the new, there is no sense of loss.
The traditional department store chains have too often been guilty of clinging to their past glory -- not wanting to "lose" their historical prominence -- unwilling to move quickly and experiment with new formats and concepts to embrace shoppers' changing preferences.
Amazon has no bricks & mortar past to cling to, and so will not make this mistake.
The Snake Sheds Its Skin
We don't have a lot of details yet on the specifics of Amazon's department store plans, but reports are that they will clock in at around 30,000 square feet. One anticipates this space will be configured with nimble, flexible displays, seasonally shifting merchandise, locally-relevant brands and products, and a highly interactive, digitally-enabled shopping experience.
There's no reason, other than lack of vision or will, that traditional department stores couldn't be doing something similar, even as they chase Amazon in e-commerce and close down their old mall-based mammoths. Then they too could embrace yet another pearl of wisdom often misattributed to the Buddha:
"Just as a snake sheds its skin, we must shed our past over and over again." -- Jack Kornfield
Amazon has a vision for Main Street's future, and will lead the way in redefining the department store model. Will the traditional players shed their skin and follow?