Robert Reich: 'While Amazon adds 5,000 warehouse jobs it destroys 50,000 retail jobs.'

[BlueStreak]

55. It is happening already, to a degree

Yes, it is ironic. Wal*Mart used to operate smallish stores in mostly rural areas that were not already covered by K-Mars, Sears, etc. That also happened to be in their "Made in America is good" phase. But since then, they have been driven by nothing but clinical efficiency. They keep making the boxes bigger and keep squeezing employees and suppliers harder and harder. They really have reached the breaking point. They could remain at this level, except for the Amazon factor.

Amazon senses this opportunity and that is why they are back into the same "grow now, worry about profits later" mode as when they started in the late 1990s.

They have already crushed the bookstore industry and they are well on their way to crushing Wal*Mart. But we should recognize that the Amazon customer is not exactly the Wal*Mart demographic. For one thing, you do need a credit or debit card -- i.e. some banking support. So Wal*Mart is in a spot. They really don't have much room for growth, other than in the lower demographic (and CostCo is hammering away at the higher demographic Wal*Mart customers.)

About the only good to say for Amazon is that they do have a marketing model that includes independent businesses, so they haven't crushed every little business along the way. And then there is NewEgg, which is following the Amazon model and growing quickly.