Retailers have become more aware of the different ways consumers shop. While some retail business models have been largely insulated from e-commerce competition, others like clothing and consumer electronics have seen sales slashed as as customers go online.
As consumers continue to become more information-hungry and connected in a digital way, we believe we will see new and innovative ways for retailers to reach their clients over the longer term.
E-commerce leaders like 
Amazon (AMZN) and eBay (EBAY) have garnered quite a bit of attention the past few years as the most disruptive forces to traditional retailers to emerge in decades. Although we believe that these wide-moat e-commerce leaders will continue to gain market share, many traditional retailers have responded through competitive countermeasures in 2013, including price-matching efforts, proprietary product offerings, online order fulfillment in stores, store-within-store partnerships with key vendors, and other omnichannel and mobile commerce investments. In this report, we‘ve developed a framework to assess which retailers are best positioned to compete over the long haul. While no consumer discretionary name is completely immune to e-commerce competition, we believe investors can identify potential opportunities across the broader retail space through a thorough examination of the current playing field.
It has always been difficult to establish an economic moat in the consumer cyclical space due to constantly changing consumer preferences, rapid speed to commoditization for many product categories, and low barriers to entry. The past several years have been a particularly challenging time for traditional retailers.
We believe a number of factors are to blame for structural pressures facing traditional retailers, including a challenging macroeconomic backdrop, which has pushed consumers to budget retailers. Nevertheless, we believe e-commerce has been the most disruptive headwinds to traditional retailers over the past decade; players like Amazon operate with more capital-efficient business models than traditional retailers and can pass these savings to consumers in the form of lower prices.
E-commerce now represents more than 6% of U.S. retail sales and is up approximately 14% year-to-date, according to comScore, and we expect industry growth trajectories to remain in the low-double-digit range over the next several years.
Retailers are not taking the e-commerce threat lying down. Amazon and eBay‘s impressive user and revenue growth trends have forced many retail management teams to employ more tactical measures across all channels over the past year. Since the holiday season of 2012, we‘ve seen traditional brick-and-mortar retailers adopt more aggressive (and transparent) pricematching efforts as well as other promotional activities to remain competitive with online players.
