A lot of the credit for the U.S. averting an economic recession over the past year is going to consumers as their spending has remained strong despite elevated interest rates. The latest data from the U.S. Census Bureau showed that retail sales in November were up 0.1% from October, and up 3.1% from a year earlier. Despite a high interest rate environment, strong consumer spending has helped stave off an economic meltdown, so investors should be paying attention to top retail stocks in 2024.

During the holiday shopping season at the end of 2023, consumers spent a record $9.8 billion on online shopping alone on Black Friday according to Adobe Analytics. Increasingly, shopping is moving away from in-store purchases at brick-and-mortar locations and to e-commerce channels. Data from the U.S. Department of Commerce found that e-commerce sales in America grew 7% year-over-year (YOY) in 2023 to reach $1.1 trillion, and the shift online looks likely to continue for the foreseeable future.

Lululemon Athletica (LULU)

Lululemon Athletica (NASDAQ:LULU) remains an extremely popular athletic apparel retailer, and a popular retail stock. Over the past 12 months, LULU stock has risen 53%, bringing its five year gain to 287%. Much of the company’s success is due to its e-commerce strategy. Lululemon’s direct e-commerce sales accounted for 50% of its total sales during the Covid-19 pandemic when its brick-and-mortar outlets were shuttered. Today, online sales account for 42% of its total sales volume.

That’s good news for the company and its shareholders as online sales through direct e-commerce channels are more profitable than sales at brick-and-mortar locations. Strong online sales also help to explain why Lululemon has a gross profit margin of more than 55%, which is among the highest in retail. In December, the company reported earnings that once again beat Wall Street forecasts, with third-quarter revenue up 19% from a year ago at $2.2 billion.

Brand recognition, smart e-commerce choices and expected longevity make LULU one of the top retail stocks for investors to be paying attention to right now.

Walmart (WMT)

The discount retailer Walmart (NYSE:WMT) has made boosting its e-commerce strategy a central focus since the Covid-19 pandemic took hold nearly four years ago. And the company’s efforts are paying off. In its most recent third-quarter financial report, Walmart reported that its online sales in the U.S. increased 24% YOY compared to a 3% annualized increase in sales at its brick-and-mortar stores. The company’s online sales were expected to get a further boost during the holiday shopping season.

Walmart has invested heavily in e-commerce as it strives to compete against its main rival for online shopping, Amazon (NASDAQ:AMZN). Currently, Amazon controls 38% of e-commerce sales in the U.S. compared with 6% at Walmart. However, Walmart is making some important strides towards closing that gap.

The company’s net sales from its e-commerce channel grew 12% to $53.4 billion between 2019 and 2023. Walmart’s shopping app is now more popular than Amazon’s, attracting nearly 27 million daily active users each month versus 18 million at Amazon. WMT stock has gained 11% in the last 12 months.

As a long time player in the retail space and a giant in online shopping, WMT is a solid pick for investors looking for retail stocks.

Carvana (CVNA)

Its stock is volatile and not for every investor, but there’s no question that Carvana (NYSE:CVNA) has upended the process of buying used vehicles. The company is an online-only used car retailer that enables consumers to buy, sell and trade-in vehicles with the click of a mouse. Carvana is also known for its multi-story car vending machines. In August 2023, Carvana introduced same-day delivery for customers who are either purchasing or selling a vehicle from its website.

With its focus on e-commerce sales and its move away from traditional brick-and-mortar car lots, Carvana has managed to carve out a niche role for itself within the automotive industry. The company remains the fastest growing online used car dealer in the U.S., placing it among the top 10 U.S. retailers by e-commerce sales. In 2022, Carvana had nearly $20 billion in online sales, up 50% from a year earlier.

But despite its growth, CVNA stock is volatile. In 2023, the share price gained more than 900%. However, CVNA stock remains down 87% from an all-time high reached in August 2021. Investors considering retail stocks that are shaking up the brick-and-mortar standard should proceed with caution when looking at Carvana.

On the date of publication, Joel Baglole did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.