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Amazon will be the first company worth $1 trillion, NYU’s Scott Galloway says

Along the way, it’s also going to take millions of jobs.

Amazon CEO Jeff Bezos
Amazon CEO Jeff Bezos
Asa Mathat

America has too many retail stores and “the reckoning is here,” says L2 founder and New York University professor Scott Galloway — and Amazon stands to profit from the looming chaos.

“The majority of retailers will face this triple threat of stagnant wages in the middle class, a transition away from typical retail goods to more experiences and Amazon/fast fashion,” Galloway said on the latest episode of Recode Decode, hosted by Kara Swisher. “And also the over-storing of America: We could lose a third of our retail space and probably not miss it.”

“The winners are consumers and Amazon shareholders,” he added. “But the losers are the retail ecosystem, which includes 11 million cashiers, which includes the 40 million households that have a share of Gap or Walmart. You’re effectively seeing this giant sucking sound out of the entire retail ecosystem into a small number of players.”

On the new podcast, Galloway predicted that Amazon could multiply what Prime households spend today, from $1,300 a year to $7,000 or more, and that it would beat Apple and Google to become the first company with a $1 trillion market cap. He also explained how that extreme concentration of wealth will affect everyone else.

You can listen to Recode Decode on Apple Podcasts, Google Play Music, Spotify (mobile only), TuneIn, Stitcher and SoundCloud.

Galloway said retail stores will become like newspapers: Still valuable to some, but a “difficult” investment for most. Amazon is poised to capture the “90 to 98 percent” of purchases that are tedious for consumers, while the two percent of companies that deliver joy — think Porsche, Manolo Blahnik and Ray-Ban — will probably be all right, Galloway said.

“I think the whole business world and, to a certain extent, society is going to stare at their navel and say, ‘What does it mean when we have one retailer?’” he said.

Although Amazon’s own ‘stores of the future’ have barely begun to appear in the real world, the things CEO Jeff Bezos & co. say about retail still have enormous impact. Galloway, a brand strategy expert whose firm L2 has advised a huge list of consumer companies, pointed to the video announcing Amazon Go, which promised a grocery store with no cashiers.

“Probably three of the 11 million cashiers in the U.S. got fired that day,” Galloway said. “They just don’t know it yet. There are more cashiers in the U.S. than there are teachers. And now — I’m in a lot of board rooms of retail companies, and they’re all using the term ‘optimize their stores,’ which is code for ‘fire people.’ Everyone looks to Amazon for leadership.”

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This article originally appeared on Recode.net.

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