Walmart and Costco win, malls lose as foot traffic trends signal an austere vacation district.

American consumers seem to eat more at home than they go out; shop more at supermarkets, wholesale clubs, and dollar stores at competitive prices; and spending more time at the gym, spa and cosmetics counter than the summer before the pandemic.

These are just some of the headlines of recent data on pedestrian traffic trends from Placer.ai, an analytics platform that processes real-time location data collected through some 500 mobile phone apps installed on millions of devices. In charts that paint a vivid portrait of how American consumers have responded to the pandemic — and more recently to soaring food, fuel and housing prices — Placer.ai recently reported that visits in food establishments had fallen by 11% compared to three years ago while foot traffic in grocery stores is about the same as in August 2019.

As we focus on the crucial holiday quarter of the year, the losers in the Placer.ai report are in traditionally more profitable categories, suggesting this will be a season of shrinking margins. Visits to US clothing stores are 10% behind pre-COVID days, or about 10 million fewer visits per week. Home improvement store traffic peaked in the fourth quarter of last year, when feverish consumers went on a spending spree to freshen up their living spaces. This category now sees 11% fewer visits compared to three years ago. The hardest-hit brick-and-mortar retail sector has been electronics, with traffic down 19% from the summer before COVID-19 rocked the world. It seems that those who wanted one have already bought this new TV and the Ring doorbell.

Supermarket traffic (walmart, Target, Costco, bj) is slightly higher than three years ago, while shopping center parking lots (malls and malls) are 6% less busy.

A tantalizing data point: consumers seem to prefer doing business closer to home than three years ago.

Small and medium-sized businesses – for example, local and independent shops and services – have been riding the “buy local” wave. Placer.ai is seeing steady traffic growth, with numbers up this year by around 20% from three years earlier and is currently up another 7%.

So far, the brightest spots in 2022 have been fitness (wellness and gyms), up 20% this year and currently 17% busier than before the pandemic; and “beauty stores and spas” see 32% more foot traffic.

Last year, consumers rebuilt their nests, took revenge and indulged in deferred luxuries. This year, the focus seems to be on the basics and self-improvement: probably to look good for job interviews, returns to the office, and reinvigorated social life.

That said, how to interpret all this intriguing data is really difficult.

For starters, this seems to confirm what we’ve been hearing in quarterly reports from major retailers, and it reflects the current state of consumer confidence, which has cratered over the summer. Like bears preparing for hibernation, consumers may “settle down” in response to an instinct (and a growing list of companies announcing layoffs) that tells them it’s going to be a dour vacation.

Foot traffic might seem like an obscure metric in the age of online retail, but there might be something to the adage that “consumers vote with their feet,” especially since the Generation Z discovers the joy of shopping in a physical store.

What to do with this information? Some suggested approaches for consumers and retailers:

1. On the consumer side, engage in the physical world and merge it with all the data available in the digital world, like pricing data, to get you the best price. Negotiate with the store to match it and take the product with you. It helps the retailer get rid of inventory, it helps you with what you were looking for, and at a “fair” price. It also helps the environment because you won’t be forcing a truck (oil/gas) to deliver the box (tree) to your doorstep when the product is right in front of you right now. All it takes is a conversation with the store manager.

2. On the retail side, engage with your customer. They’ve made a commitment to drive to YOUR STORE and given the challenges of hiring enough people and retaining and training staff, it makes sense that you can scale better with technology. Get off the beaten track. How can you gather consumer insights, shape the data to provide situational insight, and give it to the lesser people running your business to make better decisions?

One thing is for sure, Gen Z wants to engage and inform business leaders, but so do all other generations. Ignoring their input no longer seems logical or sustainable, any more than the outdated “suggestion box” I saw on the doorstep of a multibillion-dollar big-box retailer yesterday.

#Walmart #Costco #win #malls #lose #foot #traffic #trends #signal #austere #vacation #district

Add Comment

%d bloggers like this: