eMarketer estimates Amazon will account for $258.22B or 5% of US retail sales in 2018, which will work out to 49.1% of total online retail spend in the country
Context & Ripple Effects
This eMarketer forecast put hard numbers on what had been an open question going into 2018: how much of US online retail runs through one company. The answer — nearly half — reframed every other player's position, because it meant Amazon wasn't just the largest retailer but effectively the venue itself.
The subsequent coverage validated the trajectory rather than correcting it: eMarketer later tracked [[a:1160503|US e-commerce accelerating past 30% growth in 2020 with Amazon's US retail up an estimated 39%]], and separately charted Amazon converting that shopper gravity into an ad business, first passing Microsoft with $4.61B in ad revenue and then reaching 10.3% of the US digital ad market by 2020.
First-order effects
- Walmart, Target, and other US retailers face a market where their online sales compete inside a channel Amazon controls at roughly a 49.1% share, making Amazon's pricing and fulfillment decisions the de facto benchmark for the category.
Second-order effects
- Brands follow the shoppers: the same concentration that gives Amazon half of online retail explains why its ad business climbed from $4.61B and third place in 2018 to double-digit share of US digital ads by 2020, pulling budget directly from Google, which eMarketer already showed slipping from 38.2% to 37.2% of US digital ad spend.
Third-order effects
- If the pattern holds, US retail consolidates into a two-layer structure — one dominant marketplace plus everyone else — and the marketplace's ad platform becomes a required cost of selling online, turning retail media from a side business into a structural tax on consumer brands.
The trend: US online retail is concentrating around a single dominant platform whose shopper data converts into a fast-growing advertising business that competes with Google and Facebook.