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Scott Galloway, New York University professor and founder of L2, believes Amazon is poised to be the first company to reach the $1 trillion market cap milestone as its continues to gobble up the U.S. retail sector. "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 Monday's episode of the Recode Decode podcast. 

"And also the over-storing of America. We could lose a third of our retail space and probably not miss it."

America may have already lost a third of its retail space. From mid-market clothing companies Michael Kors and Bebe to department stores such as Macy's and Sears, 2017 has been a tough year for retail. "The winners are consumers and Amazon shareholders," Galloway said. (See also: Retail Deathwatch Continues)

This analysis comes on the heels of a bad couple of days on Wall Street, as investors take profit on what's been a bumper six months. Despite the short-term volatility, tech stocks continue to reign with four in the top five list of biggest companies by market cap. Apple Inc (AAPL) is well ahead of the field with a market cap of $775 billion, over $100 billion bigger than second place Alphabet Inc (GOOG) - the parent company of Google. Yet neither of these seem as poised as Amazon.com Inc. (AMZN) to win the race to $1 trillion. 

The growth of Amazon has been meteoric, and it's hard to argue it won't surpass Apple and Google on its march to $1 trillion. At the end of 2016, Amazon had over 65 million Prime customers, a 44 percent increase from the end of 2015, according to calculations by Morgan Stanley. And as Prime customer spending continues to dwarf regular account holders, revenue prospects are bright. (See also: Amazon and Google: By the Numbers)

Morgan Stanley estimates that the average Prime customer spends close to $2500 a year, and NYU professor Galloway said this number could reach $7000, which would propel Amazon to the $1 trillion mark. The inability of the retail sector to pivot and adapt to the changing times makes them sitting ducks for the online giant. "They just don’t know it yet. There are more cashiers in the U.S. than there are teachers," Galloway said.

"And now, I’m in a lot of boardrooms 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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