MIAMI—We've seen plenty of big box stores close, as well as mom and pop retailers. But some retail sectors are set for success in the years ahead.
GlobeSt.com sat down with Katy Welsh, ICSC Conference Committee Chair and Colliers International South Florida's senior vice president of Retail Leasing Services, to learn more about the relationship between dynamic e-commerce and brick-and-mortar stores. She also discusses which retail sectors are the strongest heading into the next five years in part two of this exclusive interview. You can still read part one: Retailers Who Don't Do This Have a Shelf Life.
GlobeSt.com: What's the relationship and dynamic between e-commerce and brick-and-mortar stores?
Welsh: Despite the recent store closures, brick-and-mortar has been a major influence on online sales and vice versa. In 2016, consumers spent $119.6 billion online on products they first browsed or researched in a physical store.
Some $81.7 billion spent online was on products picked from a physical shop. And consumers spent $10.2 billion online while actually standing in physical stores, using their mobile devices or instore ordering points. Physical stores supported $132.4 billion of online sales in 2016. In combination with in-store purchases, this means stores played a role in 95% of all US retail sales in 2016.
GlobeSt.com: Which retail sectors are the strongest?
Welsh: Overall, US retail is performing well. Over the next five years, spending in all major sectors is projected to increase.
Beauty is expected to top the list in terms of growth over the next five years, with a projected spending increase of almost 32%. Home retail, which includes furniture, housewares and home improvement, is also expected to see above-average growth. Apparel is expected to lag behind in growth due to quick-changing consumer preferences, price deflation from continued discounting and a lack of product innovation.
The grocery sector is expected to lag behind in the US, with only a 15 % increase in growth over the last five years. However, as supermarkets are shrinking, Florida is seeing an increase in new grocery stores entering the market. For example, Lucky's Market is expanding in the Florida market as well as Aldi, Sprouts and Lidl is reported to be entering the market. Casual dining and restaurants are another sector expanding in Florida. We're seeing more people eating out and expect this trend to continue.
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