U.S. e-commerce sales projected to continue growing

The future of retail over the next decade will be influenced by several important factors. These include the continued growth of e-commerce, rising retail media, geopolitical changes, and shifts in consumer behavior, according to a recent report by Bernstein. E-commerce in the U.S. is currently worth $1.2 trillion, making up 16% of total retail sales. This number is expected to grow further. Major companies like Walmart, Target, and Costco are positioned to benefit from this growth. Walmart, in particular, is seen as the leading company because of its large scale and investments in automation. Bernstein stated that Walmart's size and focus on automation will likely improve its profitability. Retail media, which involves advertising on e-commerce platforms, is anticipated to become a $100 billion industry by 2028. Walmart is expected to take the lead in this area, with its retail media business potentially growing from $4.4 billion to $10 billion. Target and Costco also have opportunities but face challenges due to their smaller selection of third-party products. The rise of artificial intelligence could change retail media in the future, but physical retail stores are still expected to be important. Companies with larger scales will have an advantage. Changes in global trade policies, especially if former President Trump returns to power, could affect supply chains. Dollar Tree and Target might be more vulnerable because they focus on discretionary items. Lastly, the DIY home improvement trend may see a comeback. After losing popularity during the pandemic, more Millennials and Gen-Z homeowners might choose to handle projects themselves due to high home prices and easier access to DIY resources. This shift could benefit companies like Lowe’s and Home Depot.