E-commerce's share of total retail sales is soaring, and Amazon is set to overtake Walmart as America's largest retailer

Walmart is no longer the only local retail giant. In fact, one market study found that Amazon is on track to overtake its Arkansas-based rival in terms of total market value over the next few years.

A study from Edge by Ascential, part of Axen Group, calculates that Amazon's total market cap will reach $631.6 billion by 2025, with a compound annual growth rate of 14% from 2020 to 2025. This means that the digital online business will overtake Walmart as the largest retailer in the United States. By 2025, Walmart's total market cap will increase to $523.3 billion, representing a compound annual growth rate of 3.9%.

As a brick-and-mortar store, Walmart has lagged behind Amazon in e-commerce capabilities. In fact, Walmart has already begun to overhaul its online capabilities through a program called "Project Glass" to improve its digital execution performance. While the company has leveraged its large physical footprint to become a major player in online sales, Edge research found that may not be enough to catch up with Amazon.

All in all, an estimate from Retail Insight shows the staying power of e-commerce. The report found that 29 percent of chain retail sales will come from e-commerce by 2025, when online sales in the United States alone will grow by more than $1 trillion.

Edge estimates that kroger will reach $166.6 billion in sales by 2025, keeping it in third place among retailers.

Deren Baker, CEO of Edge, said in a statement that as Amazon grows to become the largest retailer in the U.S., brands must understand that they can't win with mass personalization when faced with the enormous spending power of a large marketplace like this one. Therefore, they should ensure that they have the right strategy in place to leverage a marketplace like Amazon to attract the right consumers and meet their needs.