The assumption that Amazon has somehow caused what has come to be known as the “retail apocalypse” does not have any factual basis in reality. Data regarding online sales and retail bankruptcies don’t appear to correlate Amazon’s rise with retail’s failure. The current crisis has already exceeded the depths of the despair that occurred in 2008, yet almost no one has mentioned this or predicted it. Amazon cannot be said to account for more than 10% of the recent Collapse in the retail sector.

Amazon and retail fallacy

Much has been made in recent times about the rise of Amazon and the fall of retail sales.

There is an implicit assumption stating that the two are somehow related. Not only are they supposedly related, but also many seem to think that retail has failed as a direct result of Amazon’s growth. While this makes some intuitive sense, the idea has no factual basis in reality, and there is not a shred of evidence to support such a notion.

For one thing, the sudden collapse in retail sales has not been mirrored by Amazon’s growth. CNN states that by April, after Q1 2017, retail store closings had already exceeded that of 2008, the worst year on record. In other words, 2017 has been the worst year for retail stores in history. How can anyone possibly blame Amazon for this? Where do they even enter the equation?Amazon doesn’t sell brands that have gone out of business.

In addition, Amazon does not sell many of the products that people have stopped buying. Take a look at just a few of the many retailers who have struggled severely or gone bankrupt this year, for example. Many brands made my Macy’s inc., The Limited, Bebe, Forever 21, and others are not sold by Amazon. Given that the products being sold are not sold by Amazon, there cannot be said to even be the slightest correlation between the two.

And yet, for many people, outright causation is a given, and there can be no other conclusion.

The idea itself makes no sense

All objective data and evidence-based reasoning aside, there are some fundamental flaws in the whole “Amazon destroying all competitors” meme. For example, what about Best Buy? Amazon sells lots of electronics, and yet Best Buy has been doing just fine.

And perhaps the most important questions of all to ask are…why now, and how did so few see this coming? Was 2017 the year that everyone just decided to buy everything on Amazon for no apparent reason?

Even in the wake of the 2008 financial collapse, there were several notable people who forecasted years ahead of time that something was coming down the line. Yet somehow this conclusion about Amazon that has been taken as obvious and indisputable fact seemed to have escaped economists and experts the world over. If it’s so obvious, how can it be that not a single soul saw it coming? And why did it happen in such rapid succession, just like broader financial crises of significant magnitude always do?

If Amazon was replacing retail stores, it should have happened gradually over time. Yet the reality has been far different. We are witnessing a collapse in general consumption, not a shift in the sectors that consumers spend in.

Business Insider reports that several analysts did, in fact, predict this collapse in retail sales. And yet, the reasons they cite for expecting this do not involve Amazon whatsoever.

What's Amazon got to do with it?

In short, Amazon has nothing to do with the retail apocalypse. If it is a factor, the extent to which it has had an impact can only be measured in single-digit percentage points, given that online sales only account for 10% of all sales. The fact that despite this, the general public still somehow accepts without question the baseless assertion that “Amazon killed retail” is alarming the say the least.

The simple fact is that people have run out of disposable income. Despite the so-called "recovery" in stock markets and real estate, wages have stagnated while living costs have soared. With over 100 million people either unemployed or no longer looking for work (not in the labor force), it's not surprising that people are spending less.