While many experts claim that “retail is dead,” the retail industry is evolving with the times into a new model that promises bigger and better things for consumers and businesses alike. These retail statistics show that the industry is as strong as ever, pointing to a great future ahead.
1. Globally, retail sales are expected to top 26.29 trillion by the end of 2019
This number reflects a combination of brick-and-mortar, direct-to-consumer, and ecommerce sales globally. Forbes predicts that several trends will drive health retail sales in 2019. These trends include companies increasingly engaging consumers outside of the normal channels, brands dominating the retail space ― and consumer mindset ― and experiential retail.
2. In the United States alone, retail accounts for $2.6 trillion in sales
The U.S. loves its retail stores. American spend $2.6 trillion annually on retail purchases. The sector employs 42 million people nationwide. These individuals work in small “mom-and-pop” stores as well as large department stores.
3. Retail and food services in the U.S. accounted for $513 billion in November 2018
Retail sales surged at the end of 2018 in anticipation of the holiday season, but they were also up 4% from the previous year. A robust economy, optimistic attitude towards the future, and strong unemployment figures added to the overall positive numbers.
4. 54% of retailers believe that customer experience should be their focus
Customer experience refers to brand perception. As an increasingly homogenous supply of goods vies for customers’ dollars, retailers turn to brand experience as the method by which they can set themselves apart. The recent Payless ShoeSource brand experiment, in which the discount footwear retailer set up an elaborate and elegantly branded store and marked up its discounted shoes accordingly demonstrates the power of brand perception in the retail environment. When the same shoes are on display in Payless, they retail for $39; in the false high-end experimental store, they retailed for $400. Perception is everything in the competitive world of retail.
5. 67% of Millennials and 56% of Gen Xers consumers prefer to shop online
How to win them over to brick-and-mortar shopping? We’re back to customer experience and branding. Generation X consumers tend to be more brand loyal than millennials, so consider this as part of your retail branding strategy.
6. 52.8% of Americans visit Walmart in one month
Walmart’s net sales of $482 billion are bigger than the gross domestic product (GDP) of some nations. Walmart may be synonymous with discounts and bargains on everything from toilet paper to tempeh, but keep in mind that it began as a humble Benton, Arkansas, five-and-dime. There’s hope for all small retailers out there.
7. 89% of consumers shop at bargain-driven retailers
Americans really do love a bargain. The majority of Americans regardless of demographic shop at bargain or discount stores, with 89% stating an intention to shop bargain retail. Generation Z loves a good deal, with 93% shopping at bargain retail. Millennials are next, with one in three frequenting a bargain store.
8. For every $100 spent at a local small business, roughly $68 stays in town
It pays to shop locally. For every $100 you spend at the local retail store, about $68 of that stays in town in the form of salaries to locally employed folks, locally sourced goods and more. Instead of driving to the mall, walk to the local boutique to find something special.
9. 72% of shoppers search online before entering a brick-and-mortar retail store
Gone are the days when a local small retail establishment could get by without a website. Many shopped prefer to learn about your store online before they set foot inside the actual establishment. Make sure your store sparkles ― both in person and virtually.
10. The average monthly income for a small to midsized retailer is $22,340
Of course, that’s the gross income, but that’s not too bad, considering how many experts have predicted the demise of small retail. Furniture retailers make the most with approximately $39,572 per month and cosmetics/beauty retailers the least at $18,644 per month. Shoppers also need shampoo and mascara more frequently than they need couches and tables, so the cosmetics and beauty niche may benefit more from repeat sales.
11. SMB retailers process about 482 transactions per month
New Zealand retailers processed more than 500 while North American retailers processed slightly less at 426. However, any way you slice it, that’s still a nice number to see and a healthy number of transactions.
12. 65% of retailers plan to invest in new products while 61% say they’ll invest in their store associates
Most of the retailers surveyed say they’ll invest in new product assortments, a good idea to attract customers to their stores. However, almost an equal number said they’ll invest in their people through training, salaries and other resources.
13. The most profitable industries by net margin include building supplies and distribution centers, which frequently see a 5% net
Building supply retailers, lumber retailers, and distribution centers are more lucrative than many other types of retail. Although their stock may age, a 2 x 4 doesn’t go out of style, while clothing, electronics, and similar items do age and must be discounted over time. Because these retailers rarely discount, they maintain a higher net margin.
14. Think globally with online promotions
“Single’s Day,” a Chinese holiday, garnered more sales at 39% than Black Friday at 18% and Cyber Monday at 17% for retailer Alibaba. Unfamiliar with Singles Day? It’s a day when young people in China celebrate being single. It might pay to become familiar with Single’s Day and holidays celebrated in cultures other than your own, especially if you sell online. An increasingly global marketplace means opportunism for sales from anywhere, anytime. Retailers with ecommerce presences should consider creating targeted campaigns based on unique holidays and other events for sales in lucrative markets.
15. Despite anticipated bumps in the road, retail’s future looks bright, with 4.7% growth expected in 2019
Despite the common misconception that retailing is a dead-end industry, all signs point to rapid and solid growth, at least throughout 2019. After that, economists expect some bumps in the road, especially as the trade wars with China continue and other events unsettled the global flow of goods. However, no matter which way you look at it, both brick-and-mortar and ecommerce retailers can look forward to growth potential in the near term.
Stories in the news about shopping mall closures and big retailers going bankrupt can be troubling. However, looking at these retail statistics, it’s just a sign of the old giving way to the new. Although expensive malls may be having trouble filling their retail space, local small retailers, especially those with an omnichannel presence, can build lucrative niche businesses, especially if they differentiate through branding. Customers still enjoy shopping and, of course, still need goods and services. Furniture wears out, consumables require replenishment, and fashions change, all spurring people to head out and shop at their favorite stores. It’s up to retailers to woo them with better products and services. Small, in the case of retail, may be the better option as consumers move away from malls and big department stores and back to the corner store.
Check out the following organizations, research papers, and other information resources we used when researching this article.
- Harvard Business School: Retail industry research https://hbswk.hbs.edu/Pages/browse.aspx?HBSIndustry=Retail
- KPGM: Retail Trends 2018 https://assets.kpmg/content/dam/kpmg/xx/pdf/2018/03/global-retail-trends-2018.pdf
- Deloitte: Global Power of Retailing: https://www2.deloitte.com/content/dam/Deloitte/at/Documents/about-deloitte/global-powers-of-retailing-2018.pdf
- National Retail Federation: https://www.nrf.com/
- Retail Industry Leaders Association: https://www.rila.org/Pages/default.aspx
- Retailing Market Industry Research: https://www.marketresearch.com/Consumer-Goods-c1596/Consumer-Goods-Retailing-c80/Retailing-c206/
- BCG Retail Industry Insights: https://www.bcg.com/en-us/industries/retail/insights.aspx