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The recent tossup in the retail segment and rise of online shopping may be the start of a long-term trend. Proshares pointed out that by 2020, online sales growth is expected to outpace brick-and-mortar retailers by 3-to-1 and make up $4 trillion of the global retail market. Amazon sales in North America have quintupled since 2010, expanding to $80 billion from $16 billion. Online shopping now makes up 10% of global purchases, which leaves a lot of room for growth. For 2017 alone, forecasts calculate a 35% rise in online sales.
Meanwhile, market observers also predict that almost 25% of the country’s shopping malls could close down within the next five years due to falling foot traffic. The lessening reliance on traditional stores has hurt profit margins, which are approaching lows not seen since the 2008 recession. At least 30 major retailers have already declared bankruptcy over the past three years, with almost two-thirds of them in 2017 alone.
Consumer spending habits are also a large contributor to the demise of traditional brick-and-mortar stores. More U.S. consumers, especially millennials or three out of four young shoppers, prefer buying experiences, such as travel and dining, over material goods.
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