More and more shopping is moving from brick-and-mortar retail stores to online commerce. E-commerce is also lowering the barrier to entry for retail, leading to strong growth in entrepreneurs selling goods online. Online sales are expected to keep growing faster than physical store sales for years to come.
Investing in internet and direct marketing retail stocks can be one of the best ways to capitalize on the trend. It's a broad market segment that supports several different business models, including traditional retail, which combines physical stores with online sales, direct-to-consumer retail, which has no physical presence, and online marketplaces, which facilitate internet sales between buyers and sellers.
Top stocks
Top internet and direct marketing retail stocks in 2025
1. Chewy
1. Chewy
Chewy (CHWY 0.3%) is a leading name in the fast-growing online market for pet products. E-commerce has doubled its market share in the pet industry since 2018, but it could keep growing rapidly through the end of the decade. Not only are consumers spending more on their pets than they were a decade ago, but shopping online for pet products is easier than for most other merchandise categories.
Chewy is winning a massive share of this market by growing faster than its competitors. It counts more than 20 million active customers, and more than three-quarters of its sales come from Autoship subscriptions. The company has expanded on its successful e-commerce business with a retail ad network and an expansion into healthcare services. Both present high-margin opportunities to complement the relatively low-margin online retail business.
2. Etsy
2. Etsy
Etsy (ETSY -1.59%) is an online marketplace for handcrafted goods and vintage items. Etsy's unique focus separates it from other online marketplaces, enabling it to attract both creators and buyers more efficiently.
As a marketplace business, Etsy is well positioned to generate profit. Retail is a notoriously low-margin sector, but Etsy generates comparatively attractive margins by charging fees to shop owners for listing, promoting, and selling items. Etsy is investing in expanding its services, increasing customer loyalty, and entering new markets, putting the company firmly in growth mode. Investors should know, however, that the discretionary nature of the items sold on Etsy and the company's other marketplaces makes the company very cyclical.
3. The RealReal
3. The RealReal
The RealReal (REAL 0.0%) is an online marketplace for used luxury goods. It takes items on consignment, authenticates them, and sells them. The company is focused on bringing the high-touch experience of local boutique shopping to e-commerce.
That focus comes with significant costs relative to more general marketplaces that are starting to wade into the luxury goods space. That's put some pressure on The RealReal's finances in recent years. Management had to curb growth, focusing on higher-value inventory while cutting investments. That said, the company gets the vast majority of its sales from repeat buyers, and more than half of its consignors are also buyers. That tight network of customers gives it a strong base from which to regain strength.
4. Booking Holdings
4. Booking Holdings
Booking Holdings (BKNG -2.73%) owns a portfolio of travel agency websites that list hotels and vacation rentals, airfare, rental cars, experiences, and restaurant reservations. The company's extensive listings of hotel accommodations makes its websites some of the top online destinations for travelers.
Booking is on a path to being able to completely replace a human travel agent. It's focused on offering a fully connected trip, which takes care of everything from flights and accommodations to where you'll eat and what you'll do on your vacation. Considering its massive network of hotels around the world, it's in a strong position to attract customers to its broader selection of bookable options.
5. Shopify
5. Shopify
Shopify (SHOP -3.65%) offers small online retailers the tools needed to set up an e-commerce storefront on their own domain. Unlike marketplaces, Shopify gives business owners an independent piece of the web to sell their goods and services. It generates revenue from subscriptions to its software and add-on services called merchant solutions, which include payment processing.
Shopify continues to see strong merchant adoption while existing businesses retain its services. That's resulted in high growth in its monthly recurring revenue. Meanwhile, add-on merchant services benefit from growing merchandise sales on its platform. Shopify is another company that can be highly cyclical, though, due to the fact that most of its customers are small and medium-sized businesses.
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6. DoorDash
6. DoorDash
DoorDash (DASH -2.07%) is the leading food delivery company in the U.S. It holds a 67% share of the U.S. food delivery market and also operates in Canada and Australia. The company has expanded well beyond restaurant delivery to include grocery and convenience items as well. More recently, it's taken advantage of its network of stores and customers to build its advertising business.
As a leader in several markets throughout the U.S., DoorDash is able to build a dense network of restaurants, drivers, and customers that creates a virtuous cycle for the business. Still, it;s at risk of competition from other apps that provide a wider range of services.
