Edge by Ascential has released an intriguing yet worrying report that predicts what retail will look like in 2026. Entitled “Ecommerce Shakes up the Top Five Retailers in the US,” I find it intriguing because some of their predictions are surprising. I find it worrying because of the anticipated retail consolidation.
I have read the report and provided you with a six-point synopsis followed by commentary (see below).
1. Amazon will pass Walmart to be America’s largest retailer in 2026.
2. eCommerce will represent 30.5% of total retail sales by 2026.
3. The top three U.S. retailers in 2026 will be Amazon (14.9%), Walmart (12.7%), and Costco (4.4%)
4. Amazon’s gross merchandise value will almost double by 2026.
5. Walmart’s market share will decline from 13.2% to 12.7% by 2026.
6. Third party sales on Amazon will increase by 7%, from 60% to 67% by 2026.
The good news for eCommerce providers is that they will control almost one-third of America’s retail. However, the question this raises is, if one-third of retail is conducted online, how can a bricks-and-mortar retailer maintain enough foot traffic to sustain a 200,000-square-foot store infrastructure. Remember, a physical retailer needs to lose just enough traffic to be below the threshold it needs to be profitable. With one-third of retail being through eCommerce, expect some second-tier bricks-and-mortar retailers to either go out of business or downsize.
When you add up Walmart, Amazon, and Costco’s collective predicted market share, it totals to32%. For companies in toys or consumer goods in general, that market share will be even higher. How will major toy and consumer products companies manage such a power imbalance? Even more worrying, how will smaller players handle the demands from a threesome that is, in reality, an oligopoly, defined by the Oxford Dictionary as “a state of limited competition, in which a market is shared by a small number of producers or sellers.”
In the past, the American presidents like Teddy Roosevelt fought against monopolies. Makes you wonder why they don’t anymore.
What do you think when you read these predictions? Write in and let us know.