Amazon’s one-two punch: How traditional retailers can fight back

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Aaron Rinberg Contributor

Aaron Rinberg is an associate with Battery Ventures in Herzliya, Israel.

Scott Tobin Contributor

Scott Tobin is a general partner with Battery Ventures in Herzliya, Israel.

If you think physical retail is dead, you couldn’t be more wrong. Despite the explosion in e-commerce, we’re still buying plenty of stuff in offline stores. In 2017, U.S. retail sales totaled $3.49 trillion, of which only 13 percent (about $435 billion) were e-commerce sales. True, e-commerce is growing at a much faster annual pace. But we’re still very far from the tipping point.

Amazon, the e-commerce giant, is playing an even longer game than everyone thinks. The company already dominates online retail — Amazon accounted for almost 50 percent of all U.S. e-commerce dollars spent in 2018. But now Amazon is eyeing the much bigger prize: modernizing and dominating retail sales in physical locations, mainly through the use of sophisticated data analysis. The recent reports of Amazon launching its own chain of grocery stores in several U.S. cities — separate from its recent Whole Foods acquisition — is just one example of how this could play out.

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