NEW YORK CITY—Commoditized retail may have tougher sledding this year as consumers favor retailers with strong identities as well as nontraditional channels, says FGRT. The think tank sees e-commerce, technology and changing store formats all making further inroads into reshaping traditional retail.

“We see no letup in the splintering of consumer spending in 2018, as specialist retailers offering ever-more choice will continue to peel dollars away from midmarket behemoths,” writes Deborah Weinswig, FGRT managing director. She adds that this year, “we expect shoppers to continue to turn to new retailers, marketplaces and channels, while retailers look for further collaborations to future-proof their offerings.”

FGRT predicts that Internet-only retailers will capture an additional $45 billion in sales domestically this year. That siphoning away from traditional retailers will be augmented by increased consumer spending on apparel rental, beauty subscriptions, meal-kit services and apparel resale, thus adding approximately $2 billion more to the total.

Weinswig writes that technology will continue to remake the shopping experience, and adopting tech early is one way that traditional, large-store retailers can fight back against the more specialized upstarts. In particular, artificial intelligence will help retailers offer individual consumers tailored interactions. These include shopping recommendations and personalized mobile-commerce portals and promotions.

“Such personalization can drive growth at specialized retailers by enabling them to create deeper connections with their customers,” writes Weinswig. “But it will be imperative for hard-hit generalist retailers, including US department stores, which can deploy AI to surface highly relevant products and services from what may be an unwieldy inventory.”

Meanwhile, FGRT's report expects continuing evolution in the formats of US malls. They'll add traffic drivers such as food halls, flexible spaces and more diverse, mixed-use anchors, including discount stores, fast-fashion outlets, apartments, hotels, classrooms and fitness centers. Click here to read the complete report.

Instant Insights /

More 'Splintering' Ahead in Consumer Spending

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