We recently published Forrester’s US Retail Competition Tracker, 2026 — our annual review of the retail and e-commerce performance of 60 US retailers. We found that US retail competition continues to intensify, and savvy retailers are using their scale, digital ecosystems, and higher-margin services to capture a greater share of industry growth.

At the same time, e-commerce sales continue to grow faster than store-based retail sales, pushing them to invest more aggressively in digital capabilities, faster fulfillment, and AI-driven shopping experiences. The bar to meet customer expectations is high: Retailers must deliver seamless omnichannel experiences and improve fulfillment speed and convenience, and that’s on top of their growth goals, which include developing new revenue streams beyond traditional product sales. Following are some of our findings:

Amazon and Walmart raise the competitive bar for US retail overall

In 2025, Amazon overtook Walmart to become the world’s largest company by total revenue. Put together, the two retailers captured almost 70% of the total retail sales growth generated by the top 10 US retailers. Few competitors can match their scale, investment capacity, and interconnected ecosystems. Their advantages are becoming stronger in four ways:

  • Amazon has built a higher-margin services engine around retail. Services increased to 58% of Amazon’s revenue in 2025, more than doubling from 27% in 2015. That growth is supported by third-party seller services, advertising, subscriptions, and Amazon Web Services (AWS). With its 200-plus million members globally, Amazon Prime fuels retail growth using free shipping, which is the most important reason for US consumers for online purchases. In 2025, Amazon’s retail business operating income surpassed Walmart’s for the first time.
  • AWS gives Amazon an investment advantage that goes well beyond retail profits. AWS generates high-margin earnings and contributes to Amazon’s cash flows and liquidity, helping fund strong investment in its lower-margin retail operations. Amazon continues to invest in warehouses, robotics, last-mile delivery, faster shipping, pricing, Prime benefits, AI-driven shopping experiences, marketplace infrastructure, and advertising. Retailers that depend primarily on retail profits have far less capacity to match Amazon’s pace of investment.
  • Walmart combines its physical scale with fast-growing e-commerce and services. Nearly two-thirds of Walmart’s sales growth during the past three years came from e-commerce. Walmart is also remodeling 650 supercenters and Neighborhood Markets, including upgrades that support online grocery fulfillment. Higher-margin businesses such as advertising and membership are becoming more important to profitability, while Walmart Marketplace and the Walmart+ membership program broaden its digital ecosystem.
  • Walmart’s enormous size reinforces its price advantage. Walmart can leverage its purchasing scale to negotiate favorable supplier terms while maintaining its reputation for low prices. That advantage becomes particularly important when inflation and economic uncertainty make consumers more price-sensitive. At the same time, Walmart continues to invest heavily in supply chain automation, e-commerce, stores, fulfillment, and private label. Its annual capital expenditures have more than doubled from fiscal year 2022 to FY 2026, making it more difficult for smaller retailers to compete simultaneously on price, convenience, and investment.

How other US retailers compete: differentiation

The big question is which retailers can build the strongest ecosystem around the customer relationship. Retailers need to tap their stores as fulfillment and experience assets, remove friction between digital and physical channels, and judiciously use AI to improve product discovery, personalization, customer service, and operational efficiency. They should also actively identify and develop higher-margin revenue streams such as marketplaces, advertising, memberships, and services. Not all of these measures are right for every retailer — but do analyze what will and won’t work for your customer and for your business.

About the US Retail Competition Tracker, 2026

Forrester’s recently published US Retail Competition Tracker, 2026 analyzes the retail and e-commerce performance of 60 leading US retailers to identify category trends, competitive dynamics, and growth strategies. The analysis covers consumer electronics stores, department stores, discount stores, grocery stores, home product stores, pharmacy and drug stores, pure e-commerce companies, specialty apparel stores, specialty retailers, and supercenters/warehouse clubs. It includes companies ranging from Amazon, Walmart, Costco, and Target to Apple, CVS, Kroger, Macy’s, Nike, The Home Depot, Wayfair, and dozens of other leading retailers. Retailers can compare themselves with relevant peers while evaluating how competition is evolving across the broader US retail industry.

Forrester clients: Please download your copy of the report to learn more and schedule a guidance session with me to discuss the findings in detail.

Share