Forrester, a leading research firm, has released a report outlining the future of retail, revealing a dynamic landscape driven by both physical stores and online channels. The report, ‘Global Retail E-Commerce Forecast, 2024 To 2028,’ predicts significant growth in both sectors, with strategic considerations for retailers to navigate this evolving environment.

The rise of retail's powerhouses, online and offline

The report predicts a healthy rise in both online and offline sales. Brick-and-mortar stores, far from being relics of the past, are expected to see sales reach $4.2 trillion by 2028 in the US alone. This endurance is attributed to the unique advantages physical stores offer: the ability to touch and feel products, experience them firsthand, and receive personalized service.

However, the digital realm isn't going anywhere. Global online retail sales are projected to hit a staggering $6.8 trillion by 2028, with a projected annual growth rate of 8.9 per cent. This growth is being pushed by the rise of online marketplaces, social commerce platforms like livestream shopping, and the increasing popularity of direct-to-consumer brands.

Click-and-collect, the bridge between physical and digital

Forrester identifies a growing trend in click-and-collect purchases, where customers buy online and pick up in-store. This strategy leverages the strengths of both channels – the convenience of online browsing and the immediacy of physical product collection. The report estimates that click-and-collect sales in the US will double by 2028, reaching a significant $200 billion. This trend underscores the importance of seamless integration between online and offline retail experiences.

The fashion and apparel industry presents a fascinating case study within this evolving retail landscape. While online sales are undoubtedly growing, physical stores remain crucial for fashion brands. The ability to try on clothes, assess the quality of materials, and receive personalized advice from sales staff are all factors that continue to draw customers to physical locations.

Here's a closer look at the trends that will shape fashion retail:

Experience-driven shopping: Physical stores can create a more engaging experience by offering in-store stylists, personalized recommendations, and interactive displays.

Sustainability: Consumers are increasingly concerned about the environmental impact of their clothing choices. Retailers who prioritize sustainable practices and ethical sourcing will attract a loyal customer base.

Livestream shopping: This engaging online format allows viewers to interact with influencers and brands in real-time, driving impulse purchases.

However, fashion retailers must adapt to changing consumer preferences. Here's where the strategic drivers come into play:

Omnichannel strategy: Fashion brands need to create a seamless shopping experience across all channels – online stores, mobile apps, and physical stores.

Social commerce: Social media platforms like Instagram and TikTok are powerful tools for fashion brands. Leveraging these platforms for product promotion, influencer marketing, and even live-streamed shopping events can be a significant growth driver.

Data-driven personalization: Understanding customer preferences through data analysis allows fashion brands to personalize their offerings and recommendations across all channels.

The Forrester report highlights the importance of considering regional variations in e-commerce maturity and growth opportunities. Developed economies like the US and South Korea are ahead of the curve, while emerging markets in Asia Pacific and Latin America are catching up rapidly, driven by smartphone adoption and mobile commerce.

The future of retail is not about online versus offline, but rather about creating a seamless and personalized shopping experience that caters to the evolving needs of consumers. Retailers who can adapt to these trends and leverage the strengths of both physical and digital channels will be best positioned to thrive in the years to come.