As for the fear that Amazon, with its acquisition of Whole Foods, will now dominate food sales, the report observes that Americans spend some $800 billion per year on groceries.  WalMart accounts for $200 billion of those sales, a whopping 25% of the total.  Kroger is next with $130 billion.  Then Safeway with $60 billion.  Then Costco with $50 billion.  Even adding in Whole Foods, Amazon will sell only $20 billion worth of groceries.

In fact, says the report, Amazon does not lead in any retail category.  Amazon sells only one-third of the electronics that BestBuy does!

What has driven Amazon’s success is its stock price.  And yet the company’s actual profits are quite low.  Amazon famously sells at a very low margin and plows its earnings back into its business.  This may be commendable and good for consumers, but this business model has drawbacks for the company.  Amazon’s most profitable part of its business is its cloud services, not retail sales.

See Ciara Linnane,  Amazon is actually the weakest of the big U.S. retailers, Moody’s says – MarketWatch, and Eric Fuchs,  Moody’s:  Amazon may actually be the weakest major retailer, Yahoo Finance.

Now I still believe Amazon is revolutionary, with its full potential yet to be realized.  What it does for the consumer–creating an online inventory so vast that customers can choose from virtually every product available–is staggering.  (I remember going to book stores to see what they had.  What the store had in stock constrained what I could buy.  Now pretty much every title is at my fingertips and can be delivered either instantly on my Kindle or in two days with my Prime Membership.)  And having one business with access to nearly all customers in the world, no matter where they live, is a pretty good position to be in.

So I refuse to be skeptical about Amazon.  Still, the Moody Report reminds us that the effects of technology observe certain limits: specifically, the limits of human nature.

I remember in days of yore when I watched on my black-and-white TV reports about what the astronauts would be eating.  They would be able to get all of the nutrition they needed from pills, tubes, and Tang mixes.  Some people thought that we would all be eating like that before long.  But it turns out, people like to eat.  And now that we have reached new heights of technology, on our color big-screen digital TV monitors we are watching celebrity chefs and going to restaurants that feature local products and high-end versions of the comfort foods of our childhoods.

Similarly, online retail will change our economy.  But people still like to go shopping.

Online technology and virtual reality will offer new kinds and new levels of entertainment.  But people still have a need to occasionally get out of the house.

Illustration from Pixabay, CC0, Creative Commons