Speaking at the Summer Fair trade show in London last week, Portas said too many independent retailers tried to compete with high-street retailers. Similarly, independent garden centres should try not to compete with the likes of Wyevale and Dobbies.
Portas said an estimated 17,000 businesses would fail this year, with a further 20,000 pushed into insolvency.
The way to beat the downturn is through experience, service and specialism. Shopping will become less about the products and more about the experience, she said.
Independent retailers need to specialise and educate customers about their purchases, said Portas.
Retail and consultancy business Eco Age founder Nicola Giuggioli used Summer Fair to urge retailers to become more eco-friendly. He said: "Whoever doesn't follow this route is condemned. Customers are even more informed than we are. Sustainable business is the future and there is an opportunity to make money out of it."
Juliet Warkentin, content director of online research and trend analysis company WGSN, said that despite the decline in consumer spending, people still want change, so retailers need to find a way to offer change cost-effectively.
She said: "Customers are going to want something that's interesting and they're going to want something inspirational, but they are going to be watching their money. And that's where retailers are going to have to be careful."