NDM: Weekly News Article - W/C 10th April (62)

Amazon climbs as beneficiary of ‘retail apocalypse’

https://www.ft.com/content/0a399b8e-1e09-11e7-a454-ab04428977f9

Summary

An analyst upgrade helped lift Amazon 1.4% higher on Monday with the company seen as one of the main beneficiaries of a renewed focus on the demise of US shopping malls. This renewed focus came as weak sales and the annoucements of store closures from companies like 'Sears and Macy's' have heightened investor nerves over the sector. Kerry Rice an analyst at Needham and Company said "The retail apocalypse in the US has reached a tipping point... consumers are largely going online... Amazon is quite likely to be the largest recipient of more ecommerce transactions". The trend shows no signs of dieing down either; Mr Rice citied figures from eMarketerer in his report  that reported eccommerce as a total of sales will only increase.

Key Statistics

• Ecommerce as a total of retail sales in the US is only expected to expand from 8% in 2016 to 13.5% by 2021.

Amazon Share price: Source Thomson Reuters Datastream

• The US is still Amazon's biggest market contributing roughly to 70% of its total eCommerce revenue. 

•  Amazon's gain coincided with rival TV streaming service, Netflix which ended the day 0.5% higher at $143.85. 

• This climb for Netflix comes after recovering from a more than 1.3% fall in early morning trading.

• The earlier dip came alongside the departure of Neil Hunt, Netflix's chief product officer who will step down in July after 18 years at the company. 

My Opinion

This development for Netflix is not a shock to me personally. With the continued developments of NDM I expected stories to surface about eCommerce growing and that this would have a fatal impact on shopping outlets. Shopping online is simply more convenient for us all but it presents the question whether this demise of the shops themselves is chopping out a large chuck of the audience that is not being catered to. There are many people of the older generations who are not computer literate like the rest of us so how are they supposed to shop if the physical stores are soon to be non existent. The developments of NDM are forcing them to learn about a technology that they may not want to learn but haven't a choice.