While B&M retailers are reporting strong if not record earnings in a booming consumer environment, e-com players are seeing declines and are racking up huge losses. Even putative king-disruptor AMZN's e-com biz lost money in 3Q21.
Who is disrupting who?
Who is disrupting who?
https://twitter.com/mamos20/status/1463316924234821633
The unquestioned assumption of investors for many years has been that e-com has a lower cost structure to traditional retail. However, it's always been hard - and still is - to find evidence of that in company financial statements; indeed, they attest to the contrary.
Home delivery is expensive & labour intensive. B&M outlets are efficient distribution points for large amounts of goods; benefit from "free" customer picking & packing; and can service multiple markets at same time (in store shopping; returns & service; e-com delivery points).
Financial statements are to stock market narratives/hypotheses what data is to scientific theories. They are analogous to the scientific method - it's the way you test narratives to see if the data actually support widespread assumptions. For the most part the data does not.
That might change in the future. However, as things currently stand, there is scant evidence that e-com has a lower cost structure to traditional retail. This is why growth has required large losses. Those additional costs cannot be embedded in prices in a competitive market.
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