By integrating research across solutions, Nielsen developed a forward-looking view of the retail environment encompassing trends in channels and formats, media and communication methods, as well as the impact of consumer trends such as an increasingly aging and ethnic population, the changing definition of convenience, and the continuing focus on health and wellness.

Forecasts are based on historic annual dollar sales trends in the Nielsen Trade Dimensions database. Estimates include selected relevant factors such as channel square footage and population growth trends. Share calculations use a bottom-up summation of channel forecasts. Brick-and-mortar channel numbers do not account for potential shifts in consumer channel preference due to future changes in channel or retailer price, promotion or product assortment strategies. The e-commerce forecast assumes a moderate growth scenario.

Highlights

Traditional mass merchants and supermarkets have yielded share to value channels (club, dollar, and supercenter) and drug stores, prompting a series of changes running the gamut from format blurring to new marketing outreach techniques to shopper-tainment.

• Go micro or macro. Store footprints either get supersized for one-stop-shop convenience or downsized into smaller stores for quick grab-and-go trips.
• That’s shopper-tainment! For people who view shopping as entertainment that engages all the senses, lifestyle outlets blur the line of demarcation between traditional formats, merging restaurants with food markets, serving up food and wine tastings, providing live music and movies, and creating places for friends and co-workers to gather and socialize.
• Technology brings consumers into the shopping experience via options such as touch screen ordering, QR code advertising, mobile coupons and shopping lists.
• What’s in a [brand] name? Enough to see store brands mushroom to include super premium offerings joined by an increasing number of restaurant and celebrity-chef brands, while a few consumer packaged goods brands transitioned onto restaurant menus.
• Expect the Big 4 technology companies [Amazon, Apple, Facebook, Google] to establish beachheads outside the tech world, challenging conventional players to re-think their business models and forge new alliances or chance seeing themselves become less relevant.
• Deep discounters continue to keep the cap on operating costs in order to maintain their price edge, but low prices alone have not been enough to guarantee sales success.

Retailers will be challenged as never before in the next five years to differentiate from an ever-expanding competitive set that brings novel ideas and fresh perspective to the marketplace. Using historical trends in retail channel sales and store counts, along with a select number of macroeconomic variables, Nielsen predicts above average compounded annual dollar sales growth (CAGR) for the e-commerce, club, dollar, pet store, supercenter and drug channels ranging from 8.5 to 2.7 percent.

Responding to sales gains made by online competitors, brick-and-mortar retailers are evolving their business models to add more choices for online and offline ordering as well as delivery and pick-up options. Black Monday (the big day for online holiday shopping) appears to be garnering media coverage equal to the historical coverage of Black Friday (the day after Thanksgiving).