The Death of Retail

The Death of Retail

Summary:E-commerce is disrupting traditional retail and continues to expand with a sales growth rate of 14% year-over-year.AMZN / WFM exemplifies how the retail landscape is shifting – SHLD exemplifies the hardships of a restructuring.A new age of consumer spending has seemingly taken some of the retail sector by surprise. Brick and mortar stores are battling a time where 95% of Americans are within arm’s reach of their smartphone 24/7 and e-commerce sales are consistently growing at a rate of 14% year-over-year.¹Are statistics like this only the beginning, or are concerns overblown? To find out, investors should start from the top.The Macro Retail Environment There is no question that the Internet is a key player to any modern omnichannel sales strategy. However, according to the St. Louis Fed, surprisingly enough, e-commerce retail sales as a percentage of total retail sales currently stands at 8.5%, per the latest quarterly update in May 2017 – The pervasiveness of this trend and its aforementioned growth rate is concerning to players who haven’t gained a foothold in this channel yet.E-commerce has penetrated retail sales in a material way, but in some sectors more than others. According to sector analysis broken down by the North American Industry Classification System in the latest US Census Bureau’s Annual Retail Trade Report, the “electronic shopping and mail-order” sector is dominated by e-commerce; where online sales drive 68% of total sales.² Within this sector, we have online behemoth Amazon. Interestingly enough, Amazon is reported to power 43% of the American online retail market in 2016, according to Slice Intelligence.³ The use of robotics including cloud, industrial automation, virtual service...