The Amazon Effect has been known to stifle the growth and business of several retailers. Amazon owns 50 cents of every dollar spent in online retail. However, several companies are still finding their away, according to earnings reports.
The landscape of the retail industry has experienced drastic changes over the past decade. Demand for physical stores has decreased as a result of consumers preferring to shop and make purchases online. In an effort to combat these changes, stores have been increasing their online shopping options while revising their stores to increase foot traffic and consumer spending.
Some companies, such as Macy’s, Toys R Us, and Sports Authority, have found the new wave of consumer shopping too difficult a task to overcome. However, adapting to a new retail environment has proven successful for others. In the middle of the booming economy with high consumer confidence and spending, there are an abundance of companies thriving.
Amazon’s online consumer dominance was seen as a prime issue for the financial success of Target, but the retailer’s latest quarterly results were higher than expected. Earnings reports showed that Target had their best quarter in a year, and demonstrated that the company’s mix of e-commerce push and store improvements were effective strategies. Target CEO Brian Cornell told Fox News on a conference call that, “There’s no doubt that, like others, we’re currently benefiting from a very strong consumer environment — perhaps the strongest I’ve seen in my career.”
Another major retail company that has not only survived the changes in the industry but also thrived is Walmart. Walmart’s second-quarter results surpassed analysts’ expectations with the company’s U.S. comparable sales experiencing their strongest growth in more than 10 years and with its U.S. e-commerce sales rising 40 percent. Walmart increased its U.S 2019 earnings guidance and said it is on track to increase U.S. e-commerce sales by 40 percent for the full year.
In terms of their e-commerce innovation, the company said it saw significant progress with more online goods, including 1,100 popular new brands and grocery pickup at more than 1,800 locations. Walmart said it is on track to reach about 40 percent of the U.S. population by yearend with grocery delivery. Clearly showing that the company has no plans of being stifled by the new online market.
Lastly, another retailer that has seemed to turn their company around amidst the retail revolution is Nordstrom. Nordstrom at one point even considered going private while finding it difficult to adapt. Nevertheless, its latest quarter results were strong. Nordstrom surpassed analysts’ expectations attributing success to its online business and good foot traffic at Nordstrom Rack.