Retailers, here’s a heads up: omnichannel retailing will continue to grow in 2017, and will be more pivotal for business development.
In a recent Outlook report, finance agency Fitch Ratings found out that the best way retailers can holistically serve their customers in both online and brick-and-mortar mediums is through omnichannel retailing. With more than half of retail sales growth assumed to occur online, Fitch Ratings projects that U.S. based retail sales alone will grow 3% to 4% in 2017 (excluding automobiles and gasoline).
“Spending focus on services and experiences appears here to stay, so the dividing line between best-in-class retailers and market share donors is increasingly going to be determined by which retailers can cater to the evolving landscape,” said David Silverman, a senior director for Fitch Ratings. “Those (retailers) that find success have invested in the omnichannel model and have differentiated their products and customer service to draw customers in.”
The same report also stated that Dollar Tree, Burlington Stores, Levi’s, Coach, and J.C. Penney are on the right track in this. Meanwhile, significant challenges are up for Sears, Claire’s, Gymboree, Abercrombie & Fitch, and BonTon.
To illustrate, J.C. Penney has decided to bolster its appliance and home goods department, in response to declining apparel sales, whereas Sears’ turnaround plans have continuously fallen flat. In relation, Sears recently reported a drop in sales and has announced near 100 store closings for its Sears and Kmart units.
Looking at a larger picture, retailers should learn how to best strategize around omnichannel retailing. According to Robin Lewis, a financial expert and the brains behind The Robin Report, omnichannel retailing is still in its nascent period, with most brands still building out their omnichannels.
“Some of them are further along than others, Macy’s and Nordstrom are further along than most, but they’re all in the early stages of that. That’s the most immediate short term trend that has long term implications. They have to get it right,” said Lewis in an interview with Retail Dive.