Is a retail apocalypse upon us?

Much has been made of the shifting retail landscape in recent years, and as a result, you’ve probably heard the terms “Retail Apocalypse” and/or “Amazon Effect” more times than you’d care to count. Every time a retail chain shuts its doors, the noise grows louder. Is retail really reaching its final days?

It’s not. Retail is evolving, not ending. People will always want and need to buy things, and as we learned from our RealRetail reports this summer, people all over the world actually love to shop. When major chains shut down, it’s not because retail is dying; it’s because retail is changing, and some business have failed to keep pace. After the bankruptcy of Forever21, the Washington Examiner noted, “Likely, Forever 21 is failing because it never evolved from mall staple to online powerhouse.” They’re right: retailers have to embrace omnichannel strategies to succeed.

In-store traffic matters, even in the digital age

Smart retailers are learning that, while their online presence is critical to their survival, driving consumers into their stores is the key to growing revenue. We recently embarked on a study titled, “US Retail State of the Nation 2019” that analyzed a half-million store visits in the United States. These visits were observed across 57 different retailers at over 23 thousand locations during the months of July and August 2019.  Our goals were threefold. We aimed to:

  1. Understand the retail landscape and where stores are operating either over or under capacity;
  2. Drill down on location to get a glimpse into where consumers are actively shopping on a state level – and how retailers can conquest the competition;
  3. Dive into a lifestyle behavioral analysis to grasp the nuances of real-world consumer lifestyle indicators in order to gain mindshare and improve contextual advertising.

How America Shops

When we divided the retailers we observed into broad categories, we found that sporting good brands lead in-store shopping traffic in the US, followed by a mix of fast fashion, department and specialty retailers. A full 55 percent of the country’s shopping activities happen in sports and casual stores. Stores like Dick’s, Modell’s, H&M and Marshalls drove the greatest footfall. Discount and department store retailers (i.e., Marshalls and T.J.Maxx) captured 17 percent of total visits while fast fashion (like H&M, Zara and Forever21) and luxury retailers (such as Prada and Tommy Hilfiger) hold 14 percent.

The most efficient stores in our analysis were the ones that achieved a high number of visits per store. However, while these stores are getting the lion’s share of foot traffic, they’re not necessarily driving the most sales: visits do not necessarily equate to conversions. Our recommendation to these retailers – which include Modell’s and Zara, among others – is that they retarget their in-store visitors to keep them engaged and shopping. The least efficient stores in our study, which include J. Crew and Kohl’s, should consider a more targeted communication strategy, which should help improve foot traffic.

Where America Shops

In terms of location, the stores that saw the highest footfall were, not surprisingly, within more densely populated states. In fact, nine states account for 52 percent of all apparel shopping trips in the country. The states with the most active shoppers are: New York, Texas, California, New Jersey, Florida, Pennsylvania, Illinois, Georgia and Massachussetts.

Who in America Shops – and What They Buy

We dove deeper to learn more about how shoppers in each state behave, and we found that favorite stores and brands vary from region to region. Location data provides retailers with a high-level perspective, and it can help inform customized messages, media and business strategies to adapt and thrive locally.

There’s a lot retailers can learn from shopper behaviors – all of which can assist marketing efforts. For example, Victoria’s Secret shoppers are 14 percent more likely to be seen in beauty salons, cosmetics stores and spas than retail shoppers in general. In contrast, Marshall’s shoppers are 57 percent more likely to visit theaters, movies, music venues and other cultural events than other shoppers. These insights, derived directly from Blis data, can be incredibly helpful to marketers who are looking for new ways to target and engage shoppers, and inspiring both relevant creative and tempting calls-to-action to drive consumers into the store.

An evolving landscape

So the lesson for retailers is this: retail is by no means nearing its end of days. It’s changing dramatically, for sure, but it’s certainly not dying. It’s imperative for retail brands to understand who their shoppers are, what they want, and how they want to buy those items. By now, every retailer in the world should understand the importance of their first-party data for this purpose.

An essential supplement to first-party data is real-world intelligence, based on precise, accurate location data from a partner like Blis. Real-world intelligence is the key to understanding the customer purchase journey – how your customers and the customers you want actually shop and live. When retailers can deliver the experiences, products and convenience that customers seek and expect, they will easily be able to sail past the sea-change that’s impacting the industry today.

Download our “US Retail State of the Nation 2019” report here.

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