Forrester announced retail sales results just as the first half of an NRF/4-5-4/4-4-5 2017 season has come to a close. For most retailers, this week marks the first for the fall season/second half of the 2017 retail year. The news seems abundant about retail stores closings, missed sales targets and retail executives not getting bonuses, but retail is actually doing well! The US retail market has grown 3.8% so far this year, already surpassing 2016’s 2.4% growth. Sales are expected to hit $3.56 trillion this year.
Online sales are expected to rise 14% this year to $459 billion, making 12.9% or total retail sales. Apparel, consumer electronics and computers still dominate as top producing products sold online. The news is also full of doom and gloom about Amazon hurting other retailers, but Forrester announced that while Amazon is growing at 19% over 2016 and last year 83% of adult Americans purchased at least once from Amazon, 55% also admitted using Amazon online as a resource to research products before physically purchasing elsewhere.
Are online sales hurting brick and mortar stores as much as we hear? Ecommerce sales do cause damage to retailers’ margins as they shift to a variable-cost model from a fixed-cost store model. Stores have been closing: 2000 in 2016 and a combined total of 10,000 over the past 3 years, but those stores actually are only 0.7% of the 1.44 million retail establishments in the US. Retail square footage per person in the US is averaging 24 square feet versus 16 square feet for Canadians and 4.6 square feet for every Briton. In May, 2,861 store openings were announced, proving retailers are strategically closing in weak malls.
Forrester stated in its report that the main thing holding retailers back right now is “unresolved pain points, undifferentiated (customer) experiences, decisions based on opinion rather than data”.
Sources: Retaildive.com, Marketwatch
