Davies said Amazon's move into Australia meant retailers were going to have focus on providing a good experience for shoppers.
"Having a strong brand is going to be essential."
The strong growth for retailers would likely continue for the next year or so while the economy continued to be strong.
"With interest rates where they are it's going to keep the economy fairly well buoyant."
Retailers had been through a tough few years and this last year had been about recovering from that, Davies said.
"They have managed to tick that box."
In the longer term it would come down to the strongest surviving, he said.
"Only the ones with a properly differentiated product or service are going to survive."
Outdoor clothing retailer Kathmandu had done particularly well by getting its inventory under control, a situation that had caused the company problems a few years ago, he said.
"I think the key aspect was inventory control. They have seen inventory drop slightly."
Davies said the company had also taken a step back from overseas expansion by pulling out of the UK market. It was now using distribution outlets which was a lower risk approach.
However, Kathmandu was still very reliant on its three big sales a year and how well those sales did varied depending on what the weather was doing and whether other retailers were having a sale at the same time.
Kathmandu's online sales growth helped to spread its business outside of those sales, he said.
Mohandeep Singh, an analyst with Craigs Investment Partners, said Kathmandu had seen 15 per cent growth in online sales, although this was less than 10 per cent of total sales.
"Kathmandu had a relatively good result."
Same store sales were up 3 per cent, and while that was a pretty good outcome Singh said the country had seen population growth.
"Their margins were down for the year because they had to do a bit more promotion."
A squeeze on margins has also begun to be felt by Briscoe Group, which has previously been a stand-out performer in the retail sector.
Singh said Briscoe's gross margin fell in its first-half result, a situation which did not happen very often to the company.
In the last few years the Rebel Sport part of the business had struggled with Briscoes homewares taking the lead but Rebel Sport had taken off of late with a pick-up in the leisure sector on the back of big sporting events such as the Lions rugby tour and the Masters Games.
Singh said the Warehouse had also benefited from this.
The Warehouse's result was hit by losses in its finance business which it has sold but was better than the guidance the company had previously given.
Singh pointed to stagnant earnings growth in the red sheds part of the business despite capital expenditure of $200 million to $300m over the last five years.
The company was now undertaking its third major strategy refresh in just over 10 years, he said. The Warehouse has said it will focus on everyday low prices rather than sales.
Singh said the company had ambitious plans to grow its earnings but that could be a tough ask.
"At the same time we have had a resurgence of K-Mart which has a pretty strong cult following," he said. "It all comes back to if you can hit the mark in terms of product."
K-Mart was cheap but had the right product range, while Hallenstein had also done well with its range, he said.
That was in sharp contrast to TopMan, part of the failed TopShop enterprise, which had struggled to understand the Kiwi market, he said.
It was difficult to forecast the performance of retailers because they had two big uncontrollable factors - exchange rate and weather, Singh said.
"And then there is continuing competition coming into the market."
