Despite all the attention paid to how e-commerce has shaken up the retail landscape, warehouse clubs have had a "greater effect on retail than e-commerce" over the past 15 to 20 years, according to a university study.
In the study, Ali Hortacsu and Chad Syverson of the University of Chicago focused on hard numbers, comparing the relative size and growth trajectories of warehouse clubs versus e-commerce sites.
Using Census Bureau data, researchers found that e-commerce — including catalog sales — vaulted nearly tenfold, from $35 billion in sales in 1992 to $348 billion in 2013. By comparison, the warehouse club industry grew from $40 billion to $420 billion, a 10.5-fold increase.
Further illustrating their point by highlighting the respective channel leaders, the researchers noted that Amazon grew its U.S. sales by $38 billion from 2000 to 2013 while Costco, now the third-largest U.S. retailer, saw U.S. sales grow $50 billion over the same period. Sam's Club expanded by $32 billion in that time frame.
Finally, the study found the four top warehouse clubs accounted for eight percent of retail sales in 2012, exactly 50 percent more than all e-commerce retail sales in that year.
Photo: Sam’s Club
The study concluded that the vibrancy of warehouse clubs over the years was a positive sign for all physical retailing. Researchers wrote, "The current scale and influence of this single sector of physical retail relative to all of e-commerce suggests that while physical retail is likely to continue evolving in the coming years, it is unlikely to meet its demise soon."
Researchers added that, while online "will surely continue to be a force shaping the sector going forward and may yet emerge as the dominant mode of commerce in the retail sector, its time for supremacy has not yet arrived."
The first Costco was opened in 1983 in Seattle while the first Sam's Club opened in Midwest City, OK in the same year. Amazon.com launched in 1995.
- The Ongoing Evolution of US Retail: A Format Tug-of-War - National Bureau of Economic Research
- A case that Costco and other warehouse clubs have transformed retail more than Amazon - The Washington Post (tiered sub.)
- In Our View: Lots in Store for Shoppers - Columbian
- Costco Soaring And Captivating The Retail Industry Exceeding Amazon - OutsourcingGazette
- What's the biggest change in retailing today? - CBS News