Retail stocks had been on a tear until very recently, rising with consumer confidence thanks to an improving job market and lower oil prices. But one retail executive believes the industry, particularly the fashion retailers, are facing a long-term threat that should give the bulls' pause.
"Department stores and off-price merchants are in for a difficult time" as consumers increasingly shop on mobile devices, says Steven Davis, CEO of Rue La La, the online fashion merchant famous for its 'flash sales' of designer goods.
According to Davis, fashion is a "late adopter" to e-commerce and predicts "the gravity for where consumers go to for a multiple-brand shopping experience will absolutely be online and not offline."
If true, that would be bad news for retailers like Macy's, Nordstrom's, Target and TJMaxx. Online commerce destroyed the business of once-giant computer retailers like Computer City and CompUSA and electronic merchants like Circuit City and Radio Shack, as well as book-sellers like Border's Books and music shops like Tower Records and Sam Goody's; Davis believes the same fate could befell today's retail leaders.
"I believe we're in the middle of a 25-year giant transformation of retail overall," he says. "Ultimately, what we'll find is the economics of continuing to run that traditional large-format fashion retail store - be it a department store or be it an off-price retailer will be really challenged over next 10 to 15 years."
Of course, that may be self-serving for the CEO of an online retailer but Davis believes fashion stores will continue to thrive but mainly in the "mono-brand" or vertical brand format, citing Apple stores as the model for world's top designers and brands.
Taking his forecast a step further, Davis predicts the transition to mobile will prove challenging for the early winners of e-commerce like Amazon.com, Zappos and eBay.
"How can you shop the world's biggest selection" on a smartphone?, he asks, suggesting 'less is more' in a mobile paradigm. "A giant assortment [of products] is a winning formula for desktop but my ability to navigate [that] is next to impossible on my phone."
And while the idea Amazon.com may lose its leadership role is provocative, watch the accompanying video to see how Davis thinks the so-called sharing economy, as embodied by Uber, could potentially threaten the e-commerce businesses at UPS and FedEx.
Aaron Task is Editor-at-Large of Yahoo Finance. You can follow him on Twitter at @aarontask or email him at firstname.lastname@example.org.