Amazon Holds Huge Lead in Online Audience Over Wal-Mart

The relative size of each is based on numbers from research firm comScore. It measures online audience as a combination of desktop and mobile users. In July, it put Amazon’s U.S. audience at 187 million, against Wal-Mart’s 90 million. The data show just how difficult it is for Wal-Mart to swing its customer base from its brick-and-mortar retail operations to online buyers. Even with a large investment in its online operations, e-commerce sales in the United States are only about 3% of total revenue.

Wal-Mart’s efforts online have become increasingly important, as same-store sales have stagnated. In its most recent reported quarter, these same-store sales at Wal-Mart U.S. fell 1%, and revenue rose only 3% to $74 billion. Amazon’s domestic sales rose almost 30% to $13.8 billion in its most recently reported quarter.

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Despite recent complaints about Amazon’s treatment of its employees, Wal-Mart faces a much more difficult labor problem in its brick-and-mortar operation. The company has faced successful lobbying to raise wages for its lowest paid workers. The retailer’s management said in its last earnings release that higher employee costs pushed margins lower. Amazon does not have a similar employee compensation level, although some of its German workers have pressed for better compensation.

The Amazon lead of two to one is wider than it seems. Almost every retail analyst reasons that as Amazon grows, it takes more and more business from traditional retailers. Presuming this is true, Wal-Mart, due to its size, has to be among the largest victims. As it adds e-commerce revenue, its traditional revenue is being undermined by Amazon’s ability to take its customers. That could mean that Amazon not only has an online lead over Wal- Mart, but it is stealing its traditional customers so fast that Wal-Mart’s e-commerce efforts are only bailing water from a rapidly sinking boat.