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Whenever, Wherever: Seamless Commerce is the Future of Retail
- Leading retailers are shifting strategies from defensive to offensive to acquire new customers, while new entrants face high customer acquisition costs requiring significant scale.
- The proliferation of direct-to-consumer brands is projected to accelerate driven by consumer demand for novelty, even as traditional brick-and-mortar retailers face a high volume of mall closures with estimates predicting 25% of U.S. malls will close by 2023.
- Retail sector relative strength is expected to persist due to government stimulus totaling $2,000 and high consumer savings rates, supporting continued e-commerce growth of 15% to 20% year-over-year.
- While stay-at-home sectors anticipate a slight decline, reopening sectors are forecasted for dramatic recovery as reopening cadence progresses.
- M&A activity is projected to remain elevated with SPACs representing nearly half of U.S. transactions between $1 billion and $5 billion, alongside increased spending on last-mile distribution technologies.
- Amazon's absolute dollar growth is expected to continue, though its total market contribution may stagnate as competitors enhance online relevance, while the resale market is predicted to double the size of the fast fashion industry by 2029.
- Brick-and-mortar operations will evolve toward seamless, experiential commerce integrating virtual fitting rooms and live streams, with very few pure-play large-scale physical retailers expected to remain.
- Retailers are expected to prioritize data privacy compliance, sustainability investments to address carbon and water issues, and the creation of closed-loop systems for product tracing in response to investor demands.
- The acquisition of D2C companies by traditional retailers is viewed as a mixed outcome due to cultural integration challenges, while the ability to meld online and offline personalization is deemed critical for future success.