US Insights

Avoiding the retail 'death zone'

Bryan Gildenberg

Chief Knowledge Manager

Retail 11.17.2016 / 13:00


Go high or go low, but avoid the middle.

Consumers have more choices than ever on where to spend their money. Despite this, there's been a marked decline in the number of stores consumers actually visit during any given month. The challenge for retailers is how to capture their share of shrinking consumer loyalty in an environment of increasing noise.

Kantar Retail data shows a 5.1% increase in both the number of bricks-and-mortar stores and selling space between 2008 and 2015. However, consumers shop at 24.2% fewer retailers per month than they did in 2008, buying from 19.1% fewer categories. The capacity or availability of consumers to engage with retail is moving in the opposite direction to the amount of retail.

Some 90% of everything in America is still bought and sold in bricks-and-mortar stores, but the retail industry is increasingly fragmented. In 2005, Walmart accounted for 40% of total retail sales growth in the US. Kantar Retail forecasts that between 2016 and 2021, no retailer will account for more than 5% of total growth.


Kantar Retail believes those brands that master the niches will succeed. Brands that focus on either end of the income spectrum will drive more growth, whereas brands that stay in the middle will be left behind. Costco is a niche player, but it is the third-largest retailer in the world. In the US, niches are the size of European countries.

As the world becomes more fragmented, individuals may retrench and simplify towards brands that inspire their hopes or confirm their fears. The world is getting more complex and people are getting simpler. Most of the retail models that are winning are uncomfortable and unfamiliar. If you’re uncomfortable, that’s good, because growth is going to increasingly come from uncomfortable places. Go high, or go low, but not the middle.

Source: Kantar Retail

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