Amazon (Nasdaq: AMZN) pioneered online retailing back in the 1990s. After more the 10 years, you'd think bricks-and-mortar retailers would get their act together and narrow the gap.

Easier said than done, it seems. It's not just that online retailers are gaining market share from bricks-and-mortar. It's that Amazon is getting a larger and larger share of online purchases. And I'm not just talking books and electronics. Amazon is becoming a general store for the 21st century.

It's old news to point out consumers are doing more of their buying online. What's noteworthy is that, according to a recent consumer survey by research firm TraQline, Amazon is taking share of online purchases in specialty retailing categories -- i.e., Amazon is doubly blessed by taking share in a segment that is taking share.

Here are a couple of examples from TraQline's survey:

 

Portable Power Tools

Kitchen Electrics

% Sold Online-2005 5.0% 13.0%
% Sold Online-2010 9.0% 18.0%
Amazon's Online Share-2005 22.0% 17.0%
Amazon's Online Share-2010 37.0% 35.0%
Amazon's Total Share-2005 1.1% 2.2%
Amazon's Total Share-2010 3.3% 6.3%

Source: TraQline.

In portable power tools (drills, for example), Amazon's share of all purchases -- online and offline -- tripled from 2005 to 2010. Meanwhile, Home Depot's (NYSE: HD) share of online sales in the category stagnated in the mid-single digits.

Likewise, in kitchen electrics (coffee makers, for example), Amazon's share of all purchases -- online and offline -- almost tripled from 2005 to 2010. Meanwhile, Bed Bath & Beyond's (Nasdaq: BBBY) share of online sales in the category stagnated in the low-single digits.

Wal-Mart's (NYSE: WMT) decision a few weeks ago to offer free pickup of online purchases at its local stores is evidence of the pressure Amazon is exerting on even low-price bricks-and-mortar retailers. But Wal-Mart shoppers still have to pay to have online purchases delivered to them, whereas Amazon makes it easy to get free shipping on orders over $25. How many Wal-Mart shoppers don't mind blowing the time and gas money to go pick up at a store? I don't know, but Wal-Mart's pickup policy is all not much different than Border's order online and pick up in store arrangement. Yes, the same Border's that filed for bankruptcy recently.

And in case you missed Best Buy's (NYSE: BBY) latest earnings report, that stock's subsequent nosedive tells you all you need to know.

Foolish takeaway
Amazon is not just a play on the shift to online retailing. Amazon is taking share of online retailing because it executes well and offers a compelling combination of attractive prices and convenience. Invest in companies that compete with that at your own peril.  

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