FTI Consulting forecasts U.S. online retail sales will grow to $1.2 trillion in 2024.

FTI Consulting’s 2024 Online Retail Report predicts US online retail sales to reach $1.2 trillion in 2024which is a 10% increase compared to 2023. E-commerce is expected to account for 22.7% retail market share in 2024, up from 21.6% in 2023. The report predicts that e-commerce market share will reach close to 35% by the mid-2030s, with several product categories already reaching this level.

Key trends include retailers optimizing stores for order fulfillment, managing store fleets, connecting digital and in-store experiences, and using AI for personalized shopping. The report also notes the potential impact on the market for direct-to-consumer retailers who are digitally native, particularly for high-value retailers.

Positive

US online retail sales projected to grow 10% to $1.2 trillion in 2024

The e-commerce market share is expected to increase to 22.7% in 2024 from 21.6% in 2023.

E-commerce sales growth accounted for 57% of total retail sales growth in Q1 2024.

Sales growth is expected to continue at high to mid-single-digit levels for several years

Negative

E-commerce market share growth is expected to slow down compared to pre-COVID

Annual sales growth is not expected to remain in the mid-teens as in the decade before COVID-19

Potential disruption from new e-commerce players could impact existing retailers

US online retail sales are expected to grow by $1.2 trillion in 2024, according to the analysis by FTI Consulting, this means a significant change in consumer purchasing behavior.Growing e-commerce market share 22.7% underscores the importance of digital channels for retailers. This growth, while slowing compared to pre-pandemic rates, suggests that consumers’ preference for online shopping is strengthening.

For retail investorsit emphasizes the importance of investing in companies with a strong online infrastructure, especially those that integrate multi-channel strategies. Traditional brick-and-mortar stores are transforming into order fulfillment centers reveals an adaptive strategy to optimize returns and reduce overhead. This can lead to improved margins and potentially higher stock valuations for companies that successfully manage this change.

In addition, the use artificial intelligence Improving personalized shopping experiences is a trend to watch because it can drive consumer engagement and sales. Retailers who adopt such technologies early can enjoy a competitive advantage.

Forecasted $1.2 trillion In the US, online retail sales in 2024 will account for almost 10% growth, indicating a healthy growth trajectory for the sector. This growth, mainly from brick-and-mortar retailers, is in line with the broader trend of digital transformation in retail.

From a financial perspective, investors should consider the consequences with a steady single-digit growth rate in e-commerce. While this may be slower than in the pre-pandemic era, it still positions the sector as a reliable growth area. Companies that can effectively connect the digital and physical customer journeys are likely to reap the greatest benefits.

In terms of stock performance, companies that optimize their store fleets by closing inefficient locations and reducing labor costs can see improved profit margins. This strategic realignment helps strengthen long-term financial health. In addition, growth digitally native retailers selling direct to consumers creates both opportunities and threats as they can take over market share from traditional players.

Integration artificial intelligence (AI) and other technological innovations in the retail sector, as highlighted in the report, are key. Personalized shopping experiences powered by AI are becoming a key differentiator, as they can significantly increase customer engagement and retention.

Retailers are investing in AI and related technologies to create personalized promotions are likely to see improved customer satisfaction and higher conversion rates. This could translate into stronger revenue growth and market position. Additionally, transforming physical stores into fulfillment centers is a smart use of technology to optimize logistics and inventory management, which improves operational efficiency.

For investors, the focus should be on companies that not only embrace but also lead these technology-driven changes. Companies that lag behind in this area may struggle to keep up with industry leaders, which will impact their market share and profitability.

15/07/2024 – 07:30 AM

E-commerce resumes market share gains after post-COVID lull, impacting brick-and-mortar stores

WASHINGTON, July 15, 2024 (GLOBE NEWSWIRE) — FTI Consulting, Inc. (NYSE: FCN) forecasts U.S. online retail sales to reach $1.2 trillion in 2024 there will be an increase of almost 10% since last year, according to company data Online Retail Report 2024.

The company’s retail and consumer products division, which conducted the analysis for the report, predicts that e-commerce sales in the U.S. will account for 22.7% retail market share in 2024 compared to 21.6% in 2023. Despite steady growth, the e-commerce market’s share of total retail sales is likely to decline compared to pre-COVID levels and reach a plateau around 35% by the middle of the next decade. Several product categories have already reached this level, including toys and hobbies, office supplies, consumer electronics, books and magazines, music and video, computer hardware and software, home furnishings, and sporting goods.

“E-commerce in the U.S. is maturing, returning to pre-pandemic normalcy but still taking market share, primarily from brick-and-mortar retailers,” said JD Wichser, senior managing director and leader of Retail & Consumer Products at FTI Consulting. “As the retail landscape continues to evolve, it is critical for companies to pivot their strategies toward omnichannel integration and technology innovation, while adapting to changing consumer demands, to maintain a competitive edge in a crowded field.”

E-commerce sales growth 46% total retail sales growth in 2023, which is in line with pre-COVID-19 rates, and 57% in the first quarter of 2024, the highest since 2017, excluding the pandemic. The report predicts that total U.S. e-commerce sales will not reach the mid-1990s average annual sales growth rate that they did for more than a decade before COVID, but will maintain 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 that demonstrate efforts to adapt to market changes. American retailers are moving their stores to fulfillment centers to optimize returns and inventory, managing store fleets by closing underperforming stores and reducing labor, connecting digital and in-store customer journeys, and using artificial intelligence to more closely engage with consumers.

“More and more retailers are creating personalized shopping experiences and promotions for consumers that incorporate Generative-AI content,” said Kurt Staelens, senior managing director, Retail & Consumer Products, FTI Consulting. “This type of personalization has the ability to attract and retain customers and encourage them to immerse themselves in the products they desire.”

Another trend covered in the report is the potential disruption of new entrants into the e-commerce market. Digital native retailers selling directly to consumers, which have gained popularity in the U.S. and internationally, have the potential to increase overall U.S. retail sales, and many analysts expect these platforms to take sales and market share primarily from high-value retailers, with less impact on existing e-commerce channels.

Read the full FTI Consulting report here.

About FTI Consulting
FTI Consulting, Inc. is a global business consulting firm dedicated to helping organizations manage change, mitigate risk, and resolve disputes: financial, legal, operational, political and regulatory, reputational, and transactional. With more than 8,000 employees in 33 countries and territories, FTI Consulting professionals work closely with clients to anticipate, illuminate, and overcome complex business challenges and maximize opportunities. The firm has generated $3.49 billion in revenue in fiscal year 2023. In some jurisdictions, FTI Consulting services are provided through separate legal entities that are separately capitalized and independently managed. For more information, visit www.fticonsulting.com.

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Frequently asked questions

What are FTI Consulting’s predictions for US online retail sales in 2024?

FTI Consulting forecasts that U.S. online retail sales will reach $1.2 trillion in 2024, up nearly 10% from the previous year.

What percentage of the retail market share will e-commerce account for in 2024, according to FTI Consulting (FCN) forecasts?

According to a report by FTI Consulting, e-commerce is expected to account for 22.7% of the retail market share in 2024, up from 21.6% in 2023.

What trends in the U.S. retail industry does FTI Consulting’s 2024 Online Retail Report highlight?

The report highlights trends such as retailers optimizing their stores for order fulfillment, managing their store fleets, combining digital and in-store experiences, and using artificial intelligence to create personalized shopping experiences.

What impact could digital direct-to-consumer retailers have on the U.S. e-commerce market, according to a report by FTI Consulting?

The report found that such retailers could increase overall U.S. retail sales and potentially take market share, primarily from brick-and-mortar retailers, with less impact on existing e-commerce channels.