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Will Brick and Mortar Retail Survive The 2017 Holiday Season?

It’s not easy being a brick and mortar retailer in the digital age. Shoppers that would once drive to a store to browse a vendor’s selections in their free time are now finding the best deals straight from their couches. With ever-changing market conditions and consumer preferences, the next two years could spell doom for brick-and-mortar retailers that fail to adapt and innovate.

As the critical holiday season approaches, retailers with physical stores should refine their in-store AND digital strategies in order to compete. Recently, Andrew Duguay, Prevedere’s senior economist, shared his 6-month forecast for the retail industry and what retail executives should consider in order to win this holiday shopping season.

How External Indicators Impact Brick and Mortar Retail

consumer behaviour for the holidaysMany retailers, especially those with brick and mortar retail locations, tend to rely on historical performance data when forming their holiday strategies and forecasts. While that is a good place to start, there are a variety of factors outside of a retailer’s control that affects their customers’ ability and willingness to buy. All retailers including brick-and-mortar retail can’t afford to ignore these external indicators in their planning and forecasting process.

Inflation, wage growth, and total private sector job openings are three leading retail indicators to watch, says Duguay.

When retail executives understand what is happening outside of their companies’ walls, they can better decide what to include in their stores, how to price and how to promote. Inflation and employment are typically good indicators of the spending power of U.S. consumers, and ultimately, of the performance of the retail sector. Lately, unemployment rates have been consistently under the 5% mark, meaning that more jobs are available to Americans. However, inflation is also rising – and at a faster rate than non-management wage earnings – thus creating a gap that has the potential to hurt spending power.

During a recent webinar, Duguay noted the trajectory of these factors: “The 2017 holiday impact will be minimal, but

[it] will affect consumer buying behaviors for 2018 and beyond.” While retailers may survive this holiday season without changing their strategies, 2018 is not so promising.

Refine Online & Digital Strategies for the 2017 Holiday Season


To compete and win during the holidays, brick and mortar retail must embrace digital strategies, both online and in-store, that improve customer experiences. According to Duguay, “Online sales have grown rapidly, by about 12% year over year.” This growth can be attributed to a number of factors, but what is certain is that data-driven insights have given retail executives clues that can help to optimize inventory and increase sales.

So what is a brick-and-mortar retailer to do when faced with online competition that has, even more, data available? “It’s impossible for brick-and-mortar retailers to compete with online retailers simply on promotions,” says Duguay. A common misconception is that pulling the pricing lever to match or beat the low prices found online will lead to success. While this may be a short-term solution, it won’t sustain growth and should be used sparingly, only on products that are most critical to consumer price sentiment.

Alternatively, Duguay suggests that brick-and-mortar retailers diversify their strategies to incorporate more micro-holidays instead of going big in November and December. Reaching consumers on holidays like Mother’s Day and Father’s Day, when the competition is not at Black Friday or Christmas levels, is a strategy that has proven to be successful.

For a 6-month forecast of the brick-and-mortar retail industry and additional insights on how retail executives should refine their brick-and-mortar retail strategies, a replay of our holiday 2017 shopping season webinar is available here.

Free download - CPG Playbook Forecasting and Predictive Analytics

This free illustrated playbook describes the 5-critical steps to incorporate the latest in quality data and business intelligence to predict consumer purchase behavior for the 2017 holiday season, with remarkable accuracy.  Click to download here. 


2018-06-22T00:25:21+00:00August 14th, 2017|