The firm’s retail & consumer products practice, which conducted analysis for the report, expects US e-commerce sales to account for 22.7 per cent of retail market share in 2024, compared with 21.6 per cent in 2023. Despite continued growth, e-commerce market share of total retail sales is expected to decelerate compared to the pre-COVID period and plateau near 35 per cent by the middle of next decade. Several product categories have already reached that level, including toy and hobby, office supply, consumer electronics, books and magazines, music and videos, computer hardware and software, home furnishings, and sporting goods.

“E-commerce in the US is in a maturing phase as it returns to pre-pandemic normalcy, but it continues to capture market share, primarily from store-based retailers,” said JS Wichser, a senior managing director and leader of the retail & consumer products practice at FTI Consulting. “As the retail landscape evolves, it is critical for businesses to turn their strategies toward omni-channel integration and technological innovation while adapting to shifting consumer demands to maintain a competitive edge in a crowded field.”

E-commerce sales growth represented 46 per cent of total retail sales growth in 2023, which is consistent with pre-COVID capture rates, and 57 per cent in the first quarter of 2024, its highest rate since 2017, excluding the pandemic period. The report predicts that total US e-commerce sales will not see a mid-teen annual sales growth rate year-over-year, as they did consistently for more than a decade prior to COVID, but will sustain high- to mid-single-digit sales growth for several more years.

The report also highlights several trends to watch in the US retail industry, which demonstrate an effort to adjust to market changes. US retailers are shifting their stores to fulfilment centres to optimise returns and inventory, managing store fleets by closing under-performing stores and reducing labour, blending digital and in-store customer journeys, and using artificial intelligence to engage more closely with consumers, as per the report.

“More retailers are creating personalised shopping experiences and promotions for consumers, which include the use of generative-AI content,” said Kurt Staelens, a senior managing director in the retail & consumer products practice at FTI Consulting. “This type of customisation has the ability to attract and retain customers and encourage them to immerse themselves with the products they want.”

Another trend featured in the report is the potential disruption from newcomers to the e-commerce market. Digitally native direct-to-consumer retailers, which have grown in popularity in the US and globally, have the ability to increase overall US retail sales, with many analysts expecting these platforms to take sales and market share primarily from deep value store-based retailers, having less of an impact on existing e-commerce channels.

Fibre2Fashion News Desk (RR)