Forrester Predicts Retail Sales Growth Will Stall
Retail sales will see little growth due to inflation and economic pressure, according to Forrester. Retailers must focus on delivering value to shoppers to stay competitive.
Original reporting · forrester.com
Original: “Predictions 2027: In Retail, Value Wins”
Read “Predictions 2027: In Retail, Value Wins” at Forrester →
How this was written. Content Memory wrote this article with a language model from Forrester’s reporting (model: @cf/meta/llama-3.3-70b-instruct-fp8-fast); it describes that reporting rather than adding to it. The original, linked above, is the full story.
Key points from Forrester’s report
- Retail sales growth is expected to be near zero due to inflation and economic pressure.
- Retailers must prioritize savings, convenience, and loyalty benefits to succeed.
- Private equity firms may invest in struggling retailers using AI-powered turnarounds.
- Google is expected to transform the shopping experience by focusing on deals and savings.
- Retailers should prioritize operational excellence and invest in selective technology.
Forrester reported that real US and European retail sales growth is expected to be near zero in the coming year. This is due to high energy costs and economic pressure, which will lead to a decrease in consumer spending power. As a result, retailers will need to fight for market share rather than benefiting from overall market expansion.
Retailers that prioritize savings, convenience, and loyalty benefits will be more likely to succeed. These benefits must be easy for customers to understand and access in order to be effective. Forrester suggests that retailers plan for limited marketing budgets and focus on customer retention strategies.
Private equity firms may invest in struggling retailers, using AI-powered turnarounds as a way to boost sales. However, Forrester notes that technology alone cannot solve underlying issues such as underinvestment in merchandising and operational fundamentals. Retailers with strong balance sheets should continue to invest in core capabilities to gain a competitive edge.
Google is expected to transform the shopping experience by focusing on deals and savings. This could lead to a shift in consumer behavior, with shoppers starting their purchase journey with an answer engine rather than a retailer website. Forrester advises retailers to stay on top of evolving agentic answer engine optimization strategies.
To deliver value to shoppers, retailers should prioritize operational excellence and invest in selective technology. This may include strengthening customer retention programs and creating distinctive products that cannot be easily compared on price. Forrester warns that AI investment decisions will become increasingly difficult as many use cases deliver uncertain results.
The retail landscape is expected to change significantly in the coming year, with economic pressure and evolving consumer behavior driving these changes. Forrester clients can access the full Predictions 2027 report for additional insights and recommendations on how to shape their retail strategy.
Forrester also offers complimentary resources, including blog posts and webinars, to help retailers navigate the changing landscape. These resources provide guidance on how to adapt to the post-click era of digital commerce and how consumers are reclaiming control over their digital experiences.
Questions and answers
What is driving the expected stall in retail sales growth?
Inflation and economic pressure are expected to decrease consumer spending power, leading to a decrease in retail sales growth.
How can retailers succeed in a competitive market?
Retailers that prioritize savings, convenience, and loyalty benefits, and invest in core capabilities, will be more likely to succeed.
What role will AI play in retail turnarounds?
Private equity firms may invest in struggling retailers using AI-powered turnarounds, but technology alone cannot solve underlying issues.
