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Report: Retail sales forecast to reach $3.56 trillion in 2017

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Report: Retail sales forecast to reach $3.56 trillion in 2017

Total U.S. retail sales are projected to reach $3.56 trillion in 2017, according to a recent forecast from Forrester Research.

The figure marks a $129 billion, or 3.8%, increase in sales from 2016, which Forrester said highlights increased consumer confidence and spending both online and in-store during an era that has been marked by the steady decline of the retail industry.

"Contrary to popular press, stores aren't going the way of the dodo bird," the report said.

Forrester researchers said in the 10-page report, "Surprise -- Retail is Growing! Here's What It Means for Digital Businesses," that retail is in the "midst of an extraordinary transformation" and is growing steadily, contrary to what has otherwise been a well-documented decline of retail marked by store closings and bankruptcies.

Along with its forecast $73 billion increase for brick-and-mortar sales this year, Forrester also projected that online retail sales will see a $57 billion increase to $459 billion in 2017, a 14% increase from the previous year.

Roughly $150 billion, or 33% of all online sales, will be from apparel, consumer electronics, and computer sales, the report said.

The Aug. 1 report provided a five-year outlook for online sales, which Forrester forecast will account for $713 billion, or 17% of total retail sales by 2022.

"It's great that overall retail is growing, but that doesn't make the very real store closings any less painful for either the brand or its impacted employees," the report's authors said. "Retailers need to be clear that brand and execution problems are at the core of their problems."

Forrester conceded that store closings have become unavoidable in retail, but noted that several major retailers have increased their brick-and-mortar presence during the decline. Citing figures from research and advisory firm IHL Group, the research firm said that Wal-Mart Stores Inc. opened 59 new stores in May, while Target Corp. opened 30 stores and Costco opened 29 stores in that month.

However, several major companies, including Macy's Inc., Sears Holdings Corp. and Gymboree Corp., have already announced store closures this year.

Forrester gave several reasons for retail struggles, including prioritizing competition over culture, using opinions rather than data to drive business, and ignoring the need to make their in-store experience more unique. It also warned companies against going completely digital.

"You're kidding yourself if you think you can shutter stores and instead compete more online," the report said.

The latest monthly retail sales report released by the Department of Commerce found that retail sales fell a seasonally adjusted 0.2% in June to $473.5 billion. Still, year-over-year retail sales were up by 2.8% compared with June 2016. The department is scheduled to release its July retail sales report Aug. 15.