By  on December 28, 2017

In a recap of significant retail milestones of the past year and the impact it will have on 2018, analysts at Telsey Advisory Group said in a research report this week that companies are responding to consumer demands and have changed — and will continue to change — the way they interact with shoppers.It's this response that is reshaping the consumer spending environment.The analysts noted that some of the key events that will influence the market in 2018 include: Amazon buying Whole Foods; ongoing store closures, and the value of "quality real estate."With the Amazon deal, the TAG analysts described it as "digital embracing [the] physical." The researchers said that with Amazon expanding into physical in food retailing, "which generates an estimated $627 billion in annual revenue in the U.S., it demonstrates the need to be closer to the customer, as well as the benefits of having a greater presence in a high frequency category."Early last month, Amazon rolled out additional discounts at Whole Foods in the run-up period to Thanksgiving on key items such as turkey, shrimp, eggs and salad mixes, among other products, and had framed the move as a preview of its Prime membership rewards program. At the time, John Mackey, cofounder and chief executive officer of Whole Foods, said there’s “ongoing integration and innovation with Amazon” and said the company is just in the beginning phase of its market strategy with Amazon.Whole Foods is also positioning itself as a meal solution provider — and it is using content on its blog as a key marketing tool. Regarding real estate, the TAG team said as "retail real estate valuations came under pressure through most of 2017, bids for top-tier shopping center REITs emerged, with Unibail-Rodamco buying Westfield for approximately $16 billion and Brookfield, which already owns 34 percent of GGP, restructuring its original bid of nearly $15 billion for the remainder of the company."It's unclear how these deals will impact the overall market, but investors on keeping an eye on top-tier retail properties. Meanwhile, this past year has seen a flurry of bankruptcies and TAG analysts cited recent ones such as Charming Charlie and Toys R Us — with about 7,000 store closures — as capping off a difficult year.The analysts said while "there is an expectation for continued store closures in 2018, the tally is anticipated to be lower."Other notable events that will influence 2018 include the challenges that Nordstrom and Abercrombie & Fitch had in going private as well as difficulties in finding financing for deals. The TAG analysts also said there's been product development improvement across the board, which will pay off in 2018 as companies also leverage data and experience the benefits of technologies aimed to increase personalization.For More Business News From WWD, See:Five Below’s Recipe for Disruption: Fast and Fun Product and PricingAmazon, Wal-Mart and Apple Top List of Biggest E-commerce RetailersFashion’s Future Supply Chain Is Integrated, Fluid and Designer-Centric

To continue reading this article...

To Read the Full Article
SUBSCRIBE NOW

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus