Amazon.com Inc. has become a ubiquitous part of consumer life in the United States, much as Sears was in the mid-20th century and Walmart and the shopping mall were just a decade ago. Convenience and product variety have spurred online shopping, something Amazon cultivates through its use of consumer data and access to shoppers' online presence and their smart devices.
Rising share: Amazon's share of retail sales revenue* has been increasing at a compound annual growth rate of 19% since 2013, vs. Walmart's -3.5% and the overall industry's 4%. Fourth-quarter sales trends have been on par with annual trends, with a slight uptick for Amazon.
Staying home: With more consumers opting to shop from home, on their mobile devices or through Amazon's Alexa, fewer are visiting brick-and-mortar stores.
Growing workforce: Since 2013, Amazon has grown its headcount 5.4 times to more than 500,000 employees. Sales and cash flows over that period haven't kept pace. Sales per employee are half of what they were in 2013 and cash flows per employee are down about one-third.
Market-like: Amazon's correlation** with the S&P 500 has increased in 2018 to about 0.5 from near zero in 2017. Furthermore, the market has been more exposed to the stock's downside than in years past.
*Comparable to U.S. consumer discretionary/retail sector. Grocery sales removed from Walmart revenue. **Rolling 90-day returns. Source: Bloomberg LP