What are the most notable long-term retail trends?
Retailing is an evolving industry, and has been for many, many years. We've seen formats come and go. We see the internet, and particularly mobile commerce, continuing to take market share. It's about 15% of overall retail sales, and we think that's going higher. We also see brick and mortar retailers becoming much more capable at using their stores and their internet together to attract customers and give them the most options to shop, and find what they want, when they want, where they want. We're seeing, as well, much more investment in technology, particularly artificial intelligence that's going to help retailers understand what their customer patterns are, what the customer is buying, and when, and better tailor their merchandising and marketing to very specific individual customers over time.
Can traditional brick-and-mortar retail survive?
Retailing will survive, but the stronger retailers will be continue to be much more prominent as players. We're seeing a store being used not only as a store, but as a distribution center in a sense. Most people, for example, start their home improvement projects by looking online, so a company like Home Depot or Floor and Décor need to have great websites. The websites in turn help drive customers to the store. In fact, at Home Depot, 45 percent of their online purchases are actually picked up in store. Eighty percent of returns are made in the store. So the store becomes an interactive vehicle with the online business to propel overall sales. And we're going to see a lot more customization in stores, a lot more use of technology to make the stores more interesting places to be, more experiential. I think that will continue to differentiate those stores that do survive.
Views as of 5- 23-2018 and are subject to change based on market conditions and other factors. These views should not be construed as a recommendation for any specific security or sector. Holdings named are for illustrative purposes only and do not necessarily represent holdings in any specific product. Federated Global Investment Management Corp. 18-74639 (6/18)