E-commerce

Amazon will beat Walmart by 2025, claims research

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April 28, 2021

Walmart might not like this news: Amazon is predicted to overtake the retailer, claiming title as largest U.S. retailer, within just four years.

That's the projection from Edge by Ascential's research division, Retail insight, in a report on e-commerce growth.

Amazon's gross merchandise value will hit $631.6 billion, which represents a compound annual growth rate of 14% between 2020 and 2025. In comparison, Walmart's total sales are expected to grow at a 3.9% CAGR, hitting $523.3 billion in the same timeframe, according to a press release on the report.

In terms of overall e-commerce activity, the report expects online sales will account for 29% of total chain retails sales, making it the fastest growing U.S. market channel in the next four years.

Overall e-commerce sales grew about 30% in 2020 from $546.3 billion in 2019. In 2018, sales were $471.3 billion.

"The United States Retail Landscape and Market Planning Report 2021," also expects Kroger to remain the third largest retailer in the U.S. with a CAGR of 3.6% but Costco is not far behind. The wholesale retailer, the fourth largest, should see online sales increase 47% in the same timeframe — likely the results of heavy digital technology investment.

"The United States is one of the biggest e-commerce markets in the world, and the growth accelerated by the pandemic opens doors for brands who must leverage digital channels and touchpoints to reach new consumers. Retailers and brands across sectors must innovate and prioritize omnichannel strategies in order to cater to fast-changing consumer demands. The lines between physical and digital retail is blurring and 5G-enabled smartphones will only accelerate this trend," Deren Baker, Edge by Ascential CEO, said in the release.

"The pandemic has permanently shifted consumer habits from in-store to e-commerce. This has implications for a brand's go-to-market approach but also its store strategy as stores become part of an ecosystem of retailing touchpoints rather than the main event with a digital add-on. Brands must embrace digital platforms, such as marketplaces and delivery intermediaries and customize product offerings and selling strategies accordingly," Baker added.