Seven Trends Shaping
the Future of Retail
Key industry trends for suppliers developing internal plans.
By Kantar Retail Research Team
Ka ntar Retail’s Mid-Year Forum, titled “From Exploration to Action,” examined key industry trends for suppliers to evaluate and anticipate when developing their internal plans.
Here, Kantar Retail asked seven of its
researchers to recap a core theme they took
from the June event. Their responses are
1 The growth of small formats will be substantial, leading to
greater format diversification
over the next several years.
Retailers as diverse as Giant Eagle, Tesco,
Target, and Walmart are seeking to grow
via smaller boxes in the years ahead. They
will join a number of established small-format operators ranging from Aldi to CVS
in the “race to get small” across the U.S.,
all in an effort to gain greater productivity
from more focused assets. The economics
and trip dynamics of smaller formats are
unique—they are not simply shrunken-down large boxes—and this will challenge
a number of retailers who endeavor to add
smaller stores to their portfolios.
2 Walmart Supercenters will grow more slowly than the total US
For the first time in history, Kantar Retail
is projecting Walmart’s Supercenters to
grow sales at a slower pace than the aggregate U.S. retail market over the next five
years. The implications of this for vendors
are huge. Suppliers should be ready to take
action if Walmart decides to open a new
“To survive and thrive,
both the role of a
store and a product’s
contribution to it are
eveolving. To cope,
suppliers will have to
format and grow it aggressively. In the
short term, vendors not seeing the growth
they need from Walmart may need to start
shifting resources to other channels, such
as clubs or value discount could offer some
3 The search for new growth opportunities will continue
to drive format diversification
in the years ahead.
Leading retailers have moved past a “one-
size-fits-all” mentality and are diversify-
ing their store portfolios to provide unique
solutions for different shopper segments
and shopping occasions. This includes not
only debuting new concepts but also seg-
menting existing formats to drive more
targeted growth. While this adds increas-
ing complexity to the vendor relationship,
it provides an opportunity for suppliers to
assist in retailers’ efforts to optimize for
each format/segment. Mastering the grow-
ing complexity of the marketplace is critical
not only in terms of retailer alignment, but
because it is an accurate reflection of the
U.S. shopper as well.
4 A store evolution is underway as retailers confront an increasing
risk of irrelevance. This will
necessitate a fundamental
shift in the role of the store
and, importantly, a product’s
perceived contribution to it.
Amid an environment of economic uncertainty, growing competition, and the real-ization that physical store growth no longer
contributes to sales, retailers increasingly
find themselves confronting the risk of
irrelevance. To survive and thrive, both the
role of a store and a product’s contribution
to it are evolving. To cope, suppliers will
have to adapt accordingly:
• Channel strategy is no longer relevant.
Lines blur between channels as retailers are
increasingly turning to multiple formats,
experimentation, and consumer segmentation to maximize key points of influence—this is driven to some extent by a
fragmented consumer base.
• Interaction matters more than transaction. A key component of the store evolution is its increasing focus on interaction,
rather than transaction. Products that fuel
such consumer interaction will be able to
evolve with the store; those that are unable
to, cannot endure.
5 The growing importance of Gen Y will help shape retail recovery.