E-Commerce Sector Update – April 2026

Strategic E-Commerce Sector M&A Buoys Deal Volume Amid Challenging Discretionary Spending Environment

E-Commerce sector merger and acquisition (M&A) activity gained traction year-over-year (YOY) in 2025, representing a bright spot as many dealmakers delayed transactions across the broader Consumer industry. Resilient spending through e-commerce channels supported deal closings during the year, while strategic portfolio realignments further bolstered the market with eligible targets. Digitally-native brands able to navigate the turbulent macroeconomic climate continued to engage in healthy sale processes while other operators—often serving discretionary end markets or roiling from tariff impacts—held off and will likely continue to pause M&A pursuits until financial performance improves. Emerging opportunities in artificial intelligence (AI) across the sector have provided additional avenues to bolster customer experience and operational efficiency, driving expectations for expanded consolidation activity moving through 2026 and beyond.

We’re seeing a shift away from pure growth stories toward profitability and retention in consumer e-commerce M&A. Acquirers are focusing on brands with strong repeat purchase dynamics, omni-channel potential, and differentiated positioning, alongside selective investments in technology that enhances the end-to-end customer experience.

Lisa TolliverManaging Director, Capstone Partners

E-Commerce Sector Remains a Mainstay of Consumer Spending Despite Macroeconomic Headwinds

Consumer spending via online channels continued to expand in 2025, though e-commerce sales growth moderated compared to prior periods. E-commerce sales rose 5.1% YOY in Q3 2025, down from 7.3% YOY growth in Q3 2024, according to the Federal Reserve Bank of St. Louis (FRED).¹ The growth deceleration reflected the fickle macroeconomic backdrop, cumulative impacts of inflation on available disposable income, and more intentional shopping behaviors. Despite the contraction, consumer preferences for convenient shopping experiences at lower prices and wider selections have continued to see the channel represent an increasing proportion of total retail sales. The share of e-commerce sales reached a record 16.4% of total retail sales in Q3 2025, notably eclipsing the 16.3% share during peak COVID-19 lockdowns in Q2 2020, according to FRED.² Holiday spending underscored the resilience of consumer expenditures throughout 2025. The 2025 holiday season (November 1 to December 31) saw dollars spent online jump 6.8% YOY to a record $257.8 billion, underpinned by robust growth in mobile spend (+10.7% YOY) which commanded the majority (56.4%) of online expenditures for the first time, according to a report from Adobe.³ Top categories on a dollars-spent basis included Electronics ($59.8 billion), Apparel ($49 billion), Furniture & Home Goods ($31.1 billion), and Grocery ($23.7 billion). Leading categories on a YOY growth rate basis were Grocery (+10.2% YOY), Cosmetics (+9.1% YOY), Electronics (+8.1% YOY), and Sporting Goods (+7.7% YOY). The high growth and leading dollar-share categories closely mirror trends in the E-Commerce M&A market, with leading brands possessing strong financials, defensive segments, and opportunistic acquisitions in discretionary pockets of the market experiencing more competitive sale processes.

AI Enhances Consumer Online Shopping Experiences and Efficiency, Buoying Sales, Profitability, and M&A Outlook

AI applications and integration in the E-Commerce sector have propelled the evolution of online shopping experiences, established clear competitive advantages for early adopters, and necessitated technology investment that has shaped valuation, scalability, and M&A attractiveness. Consumers have increasingly leaned on AI technology throughout shopping journeys—most evident in product discovery trends over the recent holiday period. Traffic driven from AI sources, such as large language models (LLMs), to retail sites surged 693.4% YOY in the 2025 holiday season, according to Adobe. AI has gained appeal among consumers as an improved personal shopping assistant compared to legacy chatbots, helping users discover products, compare prices, and synthesize customer reviews. More than 40% of consumers already utilize AI tools throughout their shopping journeys, with usage skewed toward younger age groups, according to an article from Mastercard.⁴ Notably, 61% of Generation Z and 57% of Millennials have adopted the tools. Agentic commerce has increasingly reduced friction, time spent, and cognitive load required throughout a digital purchase journey. These systems can plan and execute multi-step workflows such as discovery, comparison, and payment, with minimal human intervention by combining language understanding with system integration. Of note, OpenAI launched a checkout feature to its ChatGPT interface in September 2025, enabling users to complete closed-loop transactions—from product inquiry to payment—directly within the platform. These AI tools have demonstrated propensity to drive purchases per site visit, with the conversion rate of retail visits referred by ChatGPT reaching 11.4% in June 2025, compared to 10.2% from direct visits, 9.3% from paid search, and 5.3% from organic search, according to a report from SimilarWeb.⁵ “We’re seeing evidence that in addition to bringing new buyers to Etsy [NYSE:ETSY], a meaningful share of buyers engaging through ChatGPT have a prior relationship with us, including lapsed buyers, indicating that agentic shopping could be a great unlock for retention and better lifetime value. Orders originating from ChatGPT also tend to skew higher value compared to some of our more mature acquisition channels,” said Kruti Patel Goyal, CEO of Etsy (NYSE:ETSY), on the company’s Q4 2025 earnings call.⁶ AI integration and agentic commerce’s ability to enhance consumer experiences and directly boost conversion has pushed E-Commerce sector participants to invest in the technology for front-end and back-end capability enhancement.

Many sector operators have rolled out alternative AI-enabled solutions to enhance customer shopping journeys and operational efficiency. Recently, fashion retailer Zara, a subsidiary of Industria de Diseño Textil (BME:ITX), launched an AI virtual try-on tool in December 2025 to reduce return rates and improve conversion. In a similar push toward innovation, Wayfair (NYSE:W) has championed AI-enablement across its customer-facing ecosystems and back-end operations. The online furniture retailer’s generative AI discovery and inspiration capabilities for shoppers include Muse, Decorify, and a discovery tab. Muse, launched in February 2025, is a proprietary generative AI tool that allows customers to explore room ideas and create photorealistic, shoppable scenes. Decorify, an earlier feature piloted in July 2023, is a generative AI tool that functions as a virtual room styler while the discovery tab in the Wayfair application utilizes AI-generated imagery and curated carousels to drive product discovery. The company has also implemented semantic search using LLMs to decipher complex customer queries and visual search where customers can upload photos to find similar items in their catalog. On the back end, Wayfair has used generative AI at scale to improve the accuracy of product attributes, correct dimensional inaccuracies, automatically tag merchandising data, identify duplicate items in its product catalog, deploy conversational AI agents for customer service, enhance fraud protection, optimize logistics, and supply AI Copilot for all associates. This widespread deployment of AI solutions across the organization has underscored the imperative for e-commerce businesses to enhance customer experiences and internal operations to drive top-line growth and enhance profitability. Ultimately, these advancements in online shopping will likely support e-commerce penetration, digitally-native brand sales, and acquisition activity as operators evolve with new AI-enabled front-end and back-end infrastructure and find opportunities to assimilate new brands into an enhanced ecosystem.

E-Commerce Sector M&A Volume Holds Strong as Acquisition Appetite for Non-Discretionary Pockets of the Market Remains Steady

E-Commerce sector M&A activity rose 12.8% YOY to 97 transactions announced or completed in 2025 as the turbulent macroeconomic backdrop that stalled select buyers simultaneously provided well-capitalized businesses with ample opportunities to acquire high-quality digital brands. The sector’s deal volume strength bucked trends seen in the broader Consumer industry where trade policy uncertainty delayed transaction processes materially, resulting in an 18.9% YOY decline in acquisition activity. E-commerce M&A has stabilized to start 2026 with sector deal volume remaining flat YOY at 14 transactions. Digitally-native brands that successfully navigated 2025 tariff unpredictability saw revenue and EBITDA growth while maintaining stable margins. These companies attracted competitive sale processes, though some continued to face delays. Sale processes postponed in 2025 due to mixed buyer appetite are expected to come to market and drive sector M&A growth in 2026. Prospects that struggled to maintain financial performance and navigate the shifting trade landscape delayed liquidity events and will likely require an additional year or two before going to market. However, brands operating in non-discretionary pockets of the E-Commerce sector, such as Food, saw persistent acquirer interest while best-in-class discretionary businesses also experienced a healthy M&A market. The U.S. Supreme Court’s February 2026 decision to rule the International Emergency Economic Powers Act (IEEPA) reciprocal tariffs unlawful will likely provide further support for 2026 dealmaking in the E-Commerce sector. However, significant uncertainty has remained regarding the tariff ruling, whether refunds and reimbursements will be issued, the de minimis tariff exemption suspension, and new tariff implementation workarounds. Sector operators are expected to continue monitoring the trade landscape closely, but the initial sentiment following the decision has remained positive.

Strategic buyers buoyed deal volume in the E-Commerce sector, rising 26.4% YOY to 67 transactions in 2025. This tally landed just under peak strategic deal activity seen in 2021 (68 deals) and 2020 (69 deals). Private-led acquisitions saw a modest 7.1% YOY expansion but continued to command the lion’s share (46.4%) of sector acquisitions. Public strategic deals doubled YOY to 22 transactions. E-commerce transactions have become increasingly targeted and focused, with buyers looking for specific geographic, product, or capability expansions to extract distinct, high conviction synergies rather than pure scale and consolidation plays. Large corporate divestitures or spin-offs have underscored this trend, with operators trimming assets deemed non-core and lacking clear long-term value creation opportunities to solidify competitive moats and build more resilient and defensible operations. These trends are expected to persist into 2026, as agentic AI reshapes shopping experiences, the trade environment continues to  evolve, consumers balance sheet pressures weigh on organic growth, and purchasing behaviors adjust to an ongoing, somewhat uncertain macroeconomic backdrop.

Private equity (PE) activity ticked down 9.1% YOY to 30 transactions in 2025. Sponsors remained selective in their M&A pursuits, prioritizing investments in platforms with scale and add-ons for incremental synergies and operational optimization. These transactions targeted defensible segments with less demand elasticity. Platform deals declined 15.4% YOY to 11 transactions while add-ons fell by only one deal to a total of 19 in 2025. PE activity has stabilized to date, with three transactions in both year-to-date (YTD) 2026 and YTD 2025. The ruling on reciprocal tariffs will likely uplift sponsor capital deployment as a reduction in effective tariff rates lowers expected earnings headwinds, boosts margin assumptions, and allows dealmakers to enter investments at less conservative multiples. Moreover, the U.S. Leveraged Loan markets have been—and will likely continue to be—in borrower-friendly territory, underpinned by the loan supply/demand imbalance and significant borrowing cost compression. While only modest, further declines to all-in borrowing costs can reasonably be expected for 2026; the significant declines in both Secured Overnight Financing Rate (SOFR) and spread rates over the past 24 months have already made a positive impact to PE leveraged buyout (LBO) models, according to Capstone’s Q4 2025 Middle Market Leveraged Finance Update. These building tailwinds for PE capital deployment have bolstered expectations for stronger buyout activity in 2026 and 2027.

Acquisitions With Targeted Strategic Impact Underpin E-Commerce Sector M&A Activity

E-commerce transaction rationale gravitated toward measured expansion in 2025 with corporate portfolio realignment initiatives providing the market with eligible acquisition candidates despite many companies delaying sale processes. Capstone expects this calculated M&A approach to continue in 2026 and drive more widespread dealmaking across E-Commerce verticals in 2027 and 2028. Companies with deep technology stacks and verified supply chains are anticipated to accelerate consolidation activity through year-end. Select E-Commerce sector transactions are outlined below.

• eBay to Acquire Depop (February 2026, $1.2 Billion, 1.2x EV/Revenue) – In February 2026, eBay (Nasdaq:EBAY) announced its acquisition of U.K.-based apparel resale site Depop from Etsy for an enterprise value of $1.2 billion, equivalent to 1.2x EV/Revenue. Depop’s consumer-to-consumer (C2C) fashion marketplace offers a mobile-first, social-forward experience and boasts ~seven million active buyers and three million active sellers with a strong user base among younger consumers, according to eBay’s Q4 2025 earnings call.⁷ The company achieved ~$1 billion in gross merchandise sales in 2025 with 60% YOY growth in the U.S. market. Depop offers a strategic fit with eBay’s ongoing organic growth in C2C and value proposition in Fashion, a category in which eBay drives $10 billion in gross merchandise value (GMV) annually. eBay cited strong tailwinds related to the increased prioritization of sustainability, individuality, and value among Generation Z and Millennial consumers in the Reverse Commerce (Recommerce) segment as key to the deal rationale.

“Depop’s seller and buyer communities will gain access to eBay’s suite of value-added services, including financial services, shipping and cross-border trade solutions, as well as trusted experiences, like Authenticity Guarantee. Depop strengthens eBay’s leadership in C2C, broadens our demographic reach, and expands our presence in fashion and adjacent lifestyle categories,” noted Jamie Iannone, CEO of eBay, in the earnings call.

• TZP Group-Backed Kindred Bravely Acquires Storq (January 2026, Undisclosed) – TZP Group-backed Kindred Bravely acquired direct-to-consumer (DTC) motherhood brand Storq for an undisclosed sum in January 2026. Founded in 2015, Kindred Bravely operates as a digitally-native DTC maternity and breastfeeding basics apparel brand. TZP Group acquired a majority stake in the company in April 2021 (undisclosed); this deal represents Kindred Bravely’s first add-on under TZP’s ownership. Also founded in 2015, Storq offers baby sleepwear, feeding accessories, and other baby gear. The deal allows Kindred Bravely to expand its specialized product suite and enhance customer lifetime value.

“We’ve built Kindred Bravely around those tender early days of motherhood: the breastfeeding, the recovery, the quiet moments. Storq brings something we’ve been dreaming of: a way to meet moms in that next chapter, when they’re ready to step back into the world and need gear that actually works. Together, we can support moms through the full journey, with products that are both deeply functional and genuinely joyful,” said Carrie Welch, CEO of Kindred Bravely, in a press release.⁸

• Creations Foods Merges with REAL Cookies (January 2026, Undisclosed) – Creation Foods merged with REAL Cookies (January 2026). Terms of the transaction were undisclosed. Creation Foods manages a robust manufacturing footprint and its product portfolio focuses on better-for-you (BFY) snacks, including the brands HighKey Snacks, Moon Cheese, and Aw Yeah!. Founded in August 2021, REAL Cookies sells packaged gluten-free, grain-free, and plant-based cookie products under the REAL and Real Cookie Poppers brands. The digitally-native brand initially launched its products on Amazon (Nasdaq:AMZN) and its own website. The strategic merger aims to build a vertically integrated consumer packaged goods company focusing on BFY snacks in North America.

“This merger represents a highly strategic step forward for Creations Foods. We’re excited to combine our vertically integrated platform with REAL Cookies’ complementary brand and seasoned leadership, and we see meaningful synergies and a strong runway for continued growth,” noted Aki Georgacacos, CEO of Creations Foods, in a press release.⁹

• Explorer Cold Brew Acquires Savorista (January 2026, Undisclosed) – In January 2026, caffeine-conscious cold brew coffee brand Explorer Cold Brew acquired Savorista for an undisclosed sum. Savorista was founded in 2018 as a DTC e-commerce brand offering premium decaf and half-caff bagged coffees. The company’s products come in one-time purchase orders with single, bundled, and bulk brews, or subscriptions offering monthly delivery for three months, six months, nine months, and one year. Explorer Cold Brew expands its product suite of cold brew concentrates, read-to-drink cans, and oat lattes with the addition of Savorista’s bagged coffees.

“Savorista strengthens our leadership in caffeine-conscious coffee and marks the first step in building a multi-brand platform for how people actually drink coffee today,” said Cason Crane, Founder & CEO of Explorer Cold Brew, in a press release.¹⁰

The e-commerce channel has continued to demonstrate resilience amid elevated discretionary spending headwinds and a challenging macroeconomic backdrop. Advancements in AI capabilities have provided opportunities for digitally-native brands to drive conversion and enhance consumer experiences while streamlining back-end and operational management. These technological integrations will likely support profitability, growth, and longevity of the sector, driving optimism for continued M&A activity as the landscape evolves. While non-discretionary verticals within the E-Commerce sector have seen more stable dealmaking, discretionary pockets of the market are projected to require rebounding consumer confidence and additional fiscal periods of strengthened financials to see material upswings in M&A interest.

To discuss the widespread impacts of AI in E-commerce, pockets of the market where acquirers have remained active, provide an update on your business, or learn about Capstone’s wide range of advisory services and E-Commerce sector knowledge, please contact us.

Andrew Woolston, Associate, was the lead Market Intelligence contributor to this article.

Endnotes

1. Federal Reserve Bank of St. Louis, “E-Commerce Retail Sales (ECOMSA),” https://fred.stlouisfed.org/series/ECOMSA, accessed March 2, 2026.

2. Federal Reserve Bank of St. Louis, “E-Commerce Retail Sales as a Percent of Total Sales,” https://fred.stlouisfed.org/series/ECOMPCTSA, accessed March 5, 2026.

3. Adobe, “2025 Holiday Shopping Trends,” https://business.adobe.com/resources/holiday-shopping-report.html, accessed March 2, 2026.

4. Mastercard, “What Are Holiday Shoppers Putting on Their Lists? Earlier Starts and Smarter Carts,” https://www.mastercard.com/global/en/news-and-trends/stories/2025/mastercard-holiday-shopper-snapshot.html, accessed March 2, 2026.

5. SimilarWeb, “The Global State of Ecommerce 2025,” https://www.similarweb.com/corp/2025-state-of-ecommerce/, accessed March 2, 2026.

6. Etsy, “Q4 2025 Financial Results,” https://etsy-q4-2025-earnings-results.open-exchange.net/registration, accessed March 2, 2026.

7. eBay, “eBay Q4 2025 Earnings Call,” https://ebay-q4-2025-earnings-call-x8g4qi.open-exchange.net/registration, accessed March 2, 2026.

8. PR Newswire, “Kindred Bravely Acquires Storq to Support Mothers Through Every Stage of Parenthood,” https://www.prnewswire.com/news-releases/kindred-bravely-acquires-storq-to-support-mothers-through-every-stage-of-parenthood-302667639.html, accessed March 2, 2026.

9. Progressive Grocery, “Creations Foods and REAL Cookies Complete Snack Merger,” https://progressivegrocer.com/creations-foods-and-real-cookies-complete-snack-merger, accessed March 2, 2026.

10. Coloradoan, “Explorer Cold Brew Acquires Savorista, Expanding its Leadership in Caffiene-Conscious Coffee, https://www.coloradoan.com/press-release/story/40472/explorer-cold-brew-acquires-savorista-expanding-its-leadership-in-caffeine-conscious-coffee/, accessed March 2, 2026.