The Top 5 Retail Predictions For 2018

See what the future may hold for merchants
By Alan Wolf ,

Gordon Haskett analyst Chuck Grom is upbeat.

From his vantage, retailers are heading into the New Year on a head of steam, thanks to a strong holiday season, easy same-store sales comparisons, exciting new tech out of CES, and, yes, the impact of the new tax legislation.

Based on that, plus recent marketplace developments and a reading of the tea leaves, he offers up the following top five retail predictions for 2018.

5. Amazon will not buy another retailer. “Contrary to rampant speculation on the Street, we don’t see Amazon making any more brick-and-mortar acquisitions in 2018. Instead, we think the company will take some time to iron out the wrinkles in the integration of its $13.1 billion acquisition of Whole Foods before expanding further into the physical world.” Among the buyout rumblings: a pharmacy, a special brand retailer like Lululemon, or a department store like Kohl’s, Grom said.

4. Speaking of which, Kohl’s rolls out Amazon partnership chain-wide. “Following the mid-October launch of the Amazon Smart Home Experience (SHE) in 10 stores and Amazon Returns in 82 stores across Chicago and Los Angeles, we believe the stage is set for the partnership to be rolled out more broadly across the Kohl’s store base, with Amazon Return capabilities a potential fixture in all stores,” Grom observed.

3. Target makes another large acquisition (Wayfair, Sprouts or both). “Following its recent $550 million purchase of the online grocery delivery service Shipt, we think Target could double down with another big acquisition in 2018. To this end, we point to two potential candidates, Wayfair (to enhance its digital capabilities while bolstering its home décor offering) and Sprouts (to expedite its initiative to fine-tune its grocery business).”

2. eBay looks for a retail partner to build out its digital eco-system (might it be Macy’s?). “With the trend of digitally native brands expanding into brick-and-mortar gaining steam (see Walmart/Jet, Amazon/Whole Foods), we believe the e-commerce marketplace giant eBay could be on the lookout for a retail partner to further build out its eco-system. One potential partner could be Macy’s, with two former executives (Hal Lawton as President and Jill Ramsey as chief product & digital revenue officer) recently setting up shop at Herald Square. While the combination seems crazy at first, so too did an Amazon and Whole Foods combination. ... All told, it’s become much clearer to us that retail ecosystems will be the preferred model going forward and we see future integrations as a major theme … for years to come.”

1. A number of retailers will begin accepting Bitcoin. “With Bitcoin becoming a household name in late 2017, coupled with its meteoric rise in value a nightly news segment, we believe that more retailers will begin accepting the cryptocurrency as a form of payment in 2018. As it currently stands, Overstock.com and Newegg are among very few retailers who currently accept Bitcoin.”   

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