Traditional Retailers May Face An Even Greater Threat Than Online Shopping

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Retailers have already adjusted their strategies to compete with online giants like Amazon and eBay.

But this year, businesses from Macy’s to Walmart should be watching out for another threat.

It’s drug stores and supermarkets, according to a report by NPD Group.

Consumers have a very practical mentality this holiday and are more likely to gift essentials instead of splurges like fancy shoes or handbags, said Marshal Cohen, chief industry analyst at NPD, in a release.

“Retailers at all levels are likely to be challenged this year with the channel lines increasingly becoming blurred,” Cohen said in the report. “Now that consumers are less attracted to sale prices and more attracted to selection as well as convenience, stocking the right items will be essential to drive foot traffic.”

Only 10 per cent of consumers plan to spend more on holiday shopping than last year, according to NPD. The rest plan to spend the same or less.

When they do shop, it will be for practical items, which spells trouble for specialty apparel retailers like Gap and department stores like Macy’s, according to NPD.

These stores will have to get creative in order to succeed this holiday.

“While consumer confidence seems to be up retailers will still face some challenges. They will need to develop creative ways to lure shoppers into the stores,” Cohen said.

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