The retail apocalypse has claimed many victims, including Toys R Us and The Limited. But a rally in retail stocks has some hopeful that the industry’s worst days are behind it.
While the industry is certainly going through changes, some things are still the same. Walmart still tops the list as the biggest retailer in the world and ranks #1 on the Forbes Global 2000 list. The company has been investing in e-commerce, with its acquisition of Jet.com and planned acquisition of Flipkart, the largest e-commerce company in India.
It’s speculated that Walmart’s purchase of Flipkart is an attempt to compete with the company’s largest e-commerce rival: Amazon.
Amazon toppled CVS to snag the #2 position for the largest retailers. In 2017, the company purchased Whole Foods for $13 billion.
CVS was moved down to the third position. The company’s announcement that it will acquire Aetna for $69 billion has the potential to change the health insurance industry.
The fourth retailer on the Global 2000 list is Alibaba. Along with a strong performance in its retail sector, the company has also been hard at work growing other key areas of business, including cloud computing and logistics.
The retail sector is starting to see some positive changes. The XRT retail ETF gained 5% in the first full week of June. The move has put the ETF on track for its best weekly performance since the holiday season. The 10% rise in the second-quarter is its best since 2014.
Still, experts warn that the worst is not over just yet. Headwinds in retail are expected to continue, with internet competition and Millennials preferring to shop online. Rising gas prices and interest rates are making the “shopping experience” less attractive.
E-commerce continues to dominate due to the convenience and cost-savings offered. From clothing to gift baskets and flowers, shoppers can purchase just about anything online. And while search engines are driving traffic to e-commerce sites, there is one outlet that still drives more potential customers to online retailers: social media.
According to Forbes, 55% of people buy products after social media discovery. Social media selling is becoming an integral part of online strategies for big brands.
E-commerce sales have soared, with 16% year-on-year growth. Retail, on the other hand, has only seen 3% growth. Mobile app shopping has grown 54% year-on-year, making it the fastest-growing mobile app category ahead of entertainment, music and utility.