Amazon.com vs Walmart - What's Your Shopping Preference?

What's your shopping preference? Enclosed malls? Outlet Stores? Big box retailers? or Online? Personally I can't stand the thought of bumping shoulders with strangers in a crowded line. Not to mention the traffic, parking, broken shopping carts and incompetent sales people. What a nightmare. Some purchases are best accomplished at a physical store but if you know what you want why not swipe your screen and wait for it to be delivered to your door.  One day it may even be delivered from the air via drone. If you haven't seen Amazon's drone delivery system that's in the works you can check it out here.

 

How important is price to you? To most people it's very important. The smartphone has brought us near instantaneous price comparison when shopping on and offline. Why not check to see how much a product costs at a competing store across the street or how much it costs online? Common sense dictates that this is the way most people will chose to shop as price comparison becomes even easier and more convenient.

 

At the end of the day its each to their own when it comes to how you shop but the trends don't lie. Online purchases have been increasing every year. The Centre for Retail Research reports that in the USA online sales are expected to increase from $306 Billion in 2014 to $349 billion this year. That's a 14% increase in one year. In Canada the increase is expected to be around 11%.

 

A survey conducted by Pitney Bowes found that about two-thirds of consumers would rather purchase their products online through a marketplace such as eBay, Amazon and Alibaba as opposed to going directly to a retailer's own website. This is another knock for the big box retailers who are trying to sell online.

 

What does this have to do with investing? The chart below compares the performance of Amazon stock vs Walmart which clearly shows how this trend is playing out in the world of investing. Even know Walmart sells many of its products through its own website it's still losing out to Amazon as people would rather buy through their market place. The stock chart below clearly reflects the increasing trend of online shopping.

 

AMZN vs WMT

 

The direction of the lines in the chart above convey what people want in their shopping experience and that is no lines, not having to drive or park and no grumpy customer service staff. A clear trend has been playing out not only in the world of retail but also in the world of stocks. With our smartphones, tablets and smart watches close at hand this is a trend that will not be changing anytime soon.