Richard Hyman is founder of research firm Verdict Retail and analysis site Richardtalksretail.co.uk.
You may think we have already been through the retail shakeout, with many indies closing their doors and high street names, such as Jane Norman, going bust, while shopper behaviour is evolving and ecommerce has developed at a pace. But I believe there is more to come next year.
There is too much retail capacity out there to be economically viable, and that capacity is growing thanks to the addition of online. Fashion is particularly oversupplied, because remarkably little clothing capacity exited the market in 2008 following the credit crunch. I expect that to change drastically over the next few years.
The retail recovery began running out of steam this summer, with the warm weather this autumn magnifying what was already going to be a slowdown. And now we have the crazy bandwagon of discount days (Black Friday et al) that gobble up sales, dilute margins and damage customer relationships. Some retailers are running earlier and heavier discounts each year, which will have a knock-on effect for the industry as a whole.
Meanwhile, online retailing is proving to be the biggest economic game changer the industry has seen in modern times. It has been a cannibalising channel from the start. Some physical retail selling space has shut - around 3% since 2008 - which has helped sales per square foot to increase over the period by around 9%. I estimate the growth of ecommerce will add the equivalent of 77 million sq ft to total retail floor space in the UK over the next five years - some 10% more than we already have.
Expanding capacity through online means lower sales productivity. Traditional retailers will have to close stores as their ecommerce business grows -or face lower returns per square foot.
For retailers losing market share there will be less space to hide in, but for those strong enough to increase their share there will be good returns. This profound structural change is forcing retailers to be more innovative, dynamic and get ever-closer to their customers.