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Amazon Vs. Retail: It Might Be Worse Than You Thought

Amazon could capture 5% of ALL U.S. retail sales this year

Amazon is absolutely devouring e-commerce, and is eating all retailers’ suppers in the process, according to new research from eMarketer.

The research firm’s forecast also projects that the the No. 1 e-tailer will capture nearly half of all online retail sales in America this year, with a projected 49.1 percent share.

That’s up from a 43.5 percent share last year, eMarketer said.

If true, the company will claim fully 5 percent of all U.S. retail sales by the end of 2018, whether online or in-store.

Amazon’s online sales take is expected to hit $258.2 billion this year, eMarketer projects — a 29.2 percent increase, and that’s excluding travel, event tickets, Amazon Web Services (AWS) sales, advertising services and credit card agreements.

What’s more, Amazon’s market share will continue to swell, with the online giant set to account for more than 80 percent of e-tail’s expected growth this year.

And if that’s not enough to send a chill down merchants’ spines, Amazon already boasts a double-digit market share in every product category across all of U.S. e-commerce, topping out at 80 percent for books, music and video, the research firm said.

More than a quarter of Amazon’s sales (25.5 percent) are comprised of computers and other consumer electronics, making tech far and away the e-tailer’s largest merchandising category, followed next by apparel and accessories (15.4 percent).

eMarketer estimates that Amazon will pull in some $65.8 billion in CE and IT sales this year, although that figure is significantly higher than TWICE’s own Amazonian estimate of $30.1 billion in 2017, or Best Buy’s total sales ($42.2 billion) last year.

See: TWICE 2018 Top 100 CE Retailers Report

TWICE’s Amazon totals are comprised of direct sales and a percentage of sales by third-party Marketplace sellers; eMarketer’s methodology doesn’t specify a formula for the sales mix.

However, the research firm does forecast that more than two-thirds (68 percent) of Amazon’s total 2018 sales will be by Marketplace sellers (from which Amazon derives commissions and fees), while only 32 percent of the company’s sales will be direct.

Moreover, Amazon’s third-party sales are expected to grow at twice the rate of its direct sales this year (35.6 percent vs. 17.5 percent, respectively).

“The continued growth of Amazon’s Marketplace makes sense on a number of levels,” said eMarketer principal analyst Andrew Lipsman. “More buyers transacting more often on Amazon will naturally attract third-party sellers. But because third-party transactions are also more profitable, Amazon has every incentive to make the process as seamless as possible for those selling on the platform.”

The report was released on the eve of Amazon’s fourth annual Prime Day sales event for Prime members, which begins today at 3:00 p.m. ET.

See: 10 Things To Know About Prime Day 2018