E-Commerce Resumes Market Share Gains Following a Post-COVID Lull, Impacting Brick-and-Mortar Stores
WASHINGTON, July 15, 2024 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (: FCN) projects that U.S. online retail sales will reach $1.2 trillion in 2024, an increase of nearly 10% from last year, according to the firm’s 2024 Online Retail Report.
The firm’s Retail & Consumer Products practice, which conducted analysis for the report, expects U.S. e-commerce sales to account for 22.7% of retail market share in 2024, compared with 21.6% 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% 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 U.S. 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 J.D. 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 omnichannel 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% of total retail sales growth in 2023, which is consistent with pre-COVID capture rates, and 57% in the first quarter of 2024, its highest rate since 2017, excluding the pandemic period. The report predicts that total U.S. 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 U.S. retail industry, which demonstrate an effort to adjust to market changes. U.S. retailers are shifting their stores to fulfillment centers to optimize returns and inventory, managing store fleets by closing under-performing stores and reducing labor, blending digital and in-store customer journeys, and using artificial intelligence to engage more closely with consumers.
“More retailers are creating personalized 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 customization 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 U.S. and globally, have the ability to increase overall U.S. 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.
Read the full FTI Consulting report here.
About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. With more than 8,000 employees located in 33 countries and territories, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. The Company generated $3.49 billion in revenues during fiscal year 2023. In certain jurisdictions, FTI Consulting’s services are provided through distinct legal entities that are separately capitalized and independently managed. More information can be found at www.fticonsulting.com.
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