The U.S. Online Retail Forecast
Omni-channel Retailing Challenged by its Success
After years of premature and wildly errant predictions about the “death of stores” caused by online sales, we’ve come to a point where even a mild version of this scenario is dismissed as hyperbole. That’s unfortunate because we are now witnessing a shift to online sales that is impacting the physical retail landscape on a scale that can no longer be considered immaterial. These changes are gradual and cumulative, which tends to obscure their corrosive effect.
Just consider how many times this year you’ve read or heard the phrase “declining mall traffic” in the business media. This increasingly common refrain is backed by evidence; Prodco Analytics has consistently reported traffic declines at shopping centers in the midsingle digits year over year ("YOY") for the better part of the last two years, with the trend worsening in 2016. Quite simply, Americans are making fewer trips to shopping centers, particularly malls, as online shopping continues to get more convenient and popular. The transition of store-based retail chains into omni-channel merchants over the last decade has contributed greatly to this phenomenon. Omni-channel retailers collectively account for most online sales today, with many regional and national retailers today generating at least 10 percent of their sales online. (Total online sales account for nearly 12 percent of U.S. retail sales, excluding auto and gas.)