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Amazon Leads in E-Commerce but Are Rivals Catching Up?

Amazon’s piece of the U.S. e-commerce pie was already sizeable, but the company stands to carve out an even bigger slice in 2020.

According to a study released this week by market research firm eMarketer, the online giant stands to capture nearly 39 percent of U.S. e-commerce sales in 2020, a roughly 2 percent uptick from 2019. With that increase, Amazon stands to capture 4.6 percent of total retail sales—both online and offline—across the country.

Bezos’ juggernaut beats out the other top-ranking U.S. e-commerce companies by a wide margin. Coming in at a distant No. 2, Walmart has captured a little more than 5 percent of the market, while eBay ranks third at 4.7 percent. Apple, The Home Depot, Wayfair, Best Buy, Target, Costco and Macy’s round out the top 10 online sellers.

Amazon isn’t the only company making strides online, however. According to eMarketer analysts, Target’s increased focus on its e-commerce experience has led to significant gains.

The company has jumped from the No. 11 spot to No. 8 in 2020, surpassing three competitors. Target’s online business stands to increase by 24 percent in 2020, reaching $8.34 billion. Its share of the total U.S. e-commerce market is expected to grow to 1.2 percent, up from 1.1 percent last year.

“At a time when brick-and-mortar stores are struggling to keep up with the fast-changing retail landscape, Target seems to have hit the bullseye,” eMarketer forecasting analyst Cindy Liu said. “Store renovations and expanding same-day fulfillment options, such as in-store pickup, drive-up and delivery with Shipt, are paying off. Target has found a way to use its stores to fulfill online orders while keeping up with customer demands for convenience and speed.”

In 2020, the company is projected to inch past Costco in e-commerce sales, with the membership-only warehouse club slated to do $8.33 billion online.

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Macy’s and Qurate Retail Group (which owns home shopping networks QVC and HSN) will both see their e-commerce market shares decline this year, according to eMarketer’s forecast. The flagging department store will drop to 1.1 percent from 1.2 percent in 2019, while Qurate is set to drop off the top 10 list for the first time, with market share slipping to 1 percent from 1.2 percent last year.

Across the pond, Amazon’s accelerating growth is also stoking anxieties for online retail competitors. According to London-based consultancy GlobalData, Amazon’s online market share grew by more than 20 percent in 2019, representing its largest acceleration in five years’ time.

That’s a cause for concern for the country’s apparel and footwear pure plays doing business on the web. Amazon has now risen to the No. 2 spot in that category with nearly 5 percent market share, following Asos, which leads at more than 6 percent.

GlobalData analysts revealed that Amazon has found a sweet spot with men’s wear, and is forecasted to account for almost 14 percent of spending in that category based on 2019 numbers. By contrast, the company has captured about 4 percent of women’s wear spend online.

In the U.K., online pure plays are driving a significant share of overall apparel and footwear spend, and their influence is only set to increase this year. In 2019, the category accounted for more than 35 percent of spend on shoes and clothes, and by 2024, that number is projected to grow to more than 42 percent.

Asos and Amazon stand to drive much of that growth, but the space will also be bolstered by smaller and emerging retailers like Gymshark, SilkFred and Sosandar, analysts said.

“Other online pureplays are best positioned to compete with Amazon as online retailers are nimble, allowing for fast adaptation to changing consumer shopping habits and fashion trends,” Emily Salter, the firm’s retail analyst, said. Key players in the space like Asos and Boohoo are consistently raising the bar for consumer experience, she said, by introducing fit tools and buy now, pay later options.

There’s still a substantial opportunity for Amazon to grow its market share, Salter said, if it improves the user experience. The platform is “not viewed as an inspirational destination for fashionable clothing purchases due to its clunky interface that is suited to purchasing the practical items it is known for,” she added.

What the e-tailer does have on its side is unparalleled consumer loyalty, though, and that’s a concept U.K. retailers should be looking to drive within their own operations.

“To compete with Amazon in a highly competitive market, other retailers need to find new ways to drive repeat purchases with some form of loyalty scheme,” she said. “Delivery saver schemes alone are not sufficient as they are now widely available at low prices.”