Warren Buffett says that in 10 years, the retail industry will be nothing like it is now. "The department store is now on the internet," the billionaire investor said at the Berkshire Hathaway annual meeting in Omaha, Nebraska, as reported by Bob Bryan, in an article published by Business Insider .
On the other hand Amazon is now 2 times Walmart. Amazon is valued at $459 billion while Walmart is worth $228 billion, according to the Recode page .
Buffett isn't just ringing about the demise of traditional retail - he's been withdrawing his money from the industry as well.
Berkshire Hathaway gave a warning sign to the retail industry in February when it sold $900 million of Walmart stock, opting to invest billions in airlines.
The sale left Buffett with almost no Walmart shares at a time when the world's largest retailer is pouring billions into the battle to catch up with Amazon.
American retailers have been closing stores and filing for bankruptcy at rates not seen since the recession.
Retailers have announced more than 3,200 store closings so far this year, and Credit Suisse analysts expect this number to rise to more than 8,600 before the end of the year. For comparison, 6,163 stores closed in 2008, the worst year for closures on record.
Stores are closing due to the rise of electronic commerce (eCommerce) and changes in how people spend their money. Shoppers are devoting more of their wallets to entertainment, dining and technology and spending less on clothing and accessories.
Department stores like Macy's, Sears, and JCPenney have borne the brunt of these trends - since 2001, department stores have lost half a million jobs.
These reports demonstrate how important it is for retailers to have a plan in place to stay competitive in this changing marketplace. What is your business doing to survive the next 10 years?