The National Retail Federation (NRF) released its 2017 Economic Forecast this week. Not surprising was the find that online sales are predicted to be the frontrunner over traditional brick-and-mortar stores, at an increase of 8 to 12 percent, while regular non-online sales are only predicted to see a 3.7 to 4.2 percent bump.
The NRF’s chief economist, Jack Kleinhenz, said, “It is clear that online sales will continue to expand in 2017 and provide growth for the retail industry. But it is important to realize that virtually every major retailer sells online, and many of those sales will be made by discount stores, department stores and other traditional retailers. Retailers sell to consumers however they want to buy, whether it’s in-store, online or mobile.”
As more retailers begin to shift their focus toward eCommerce efforts, the online shopping trend will likely only increase over time. Retailers must decide what to do with their traditional brick-and-mortar stores. Will they reduce square footage to compensate for the lack of foot traffic? At this point, it’s tough to say what the future will be for physical stores.
Just last month, the U.S. Commerce Department released its retail data, which supports a healthy online environment for retailers. According to this research, there was a 12.8 percent increase in 2016 Q4 non-store sales, $145.49 billion higher from the prior year.
Internet Retailer quoted NRF CEO Matthew Shay, who said, “What we’re seeing is continued change and evolution to meet the needs of consumers. The business model has to evolve quickly to meet the needs of consumers. It’s clear that many companies are working as quickly as possible to transform themselves, but not all of them are going to make that jump. It’s a highly competitive environment. When there’s that level of volatility, you’re going to see businesses that aren’t going to remain competitive and new businesses emerge.”
With the NRF and the U.S. Commerce Department’s research sharing data to support online shopping increases over the next year, this will make for some interesting retail trends and predictions. With more consumers shopping online, the retail industry has no choice but to adapt.