Deck the Malls: What to Expect from Shoppers this Holiday

MSD 970 Blog Post Retailtrends V1

With Christmas fast-approaching, ‘tis the season for decked halls and shopping malls. As customers venture back to in-person shopping, retailers have wish lists of their own: supply chain disruptions are affecting inventories, manufacturers are left with a shortage of chipsets, and bargains just aren’t what they used to be.

At the beginning of the global pandemic, Foursquare began using indexed foot traffic to gain perspective on consumer trends and patterns. The data leading up to Black Friday revealed several key insights on where cards are swiping and where shoppers are griping this holiday:

  1. Online shopping is taking a hit In the wake of pandemic lockdowns, consumers are finally returning to their normal pastimes. In fact, 77% of Americans visited an arts or entertainment venue in the last several months, making their way back to museums, music venues, cinemas, casinos, and sporting events. As COVID concerns begin to ease and leisurely activities become accessible again, in-store shoppers are certainly among those hitting the streets: survey data verifies that 62% of consumers intend to shop both in-stores and online for the holidays, with less than 15% opting to shop entirely on the web.
  2. Supply chain shortages are driving shoppers into stores. Coupled with the “try before you buy” mentality that accompanies expensive purchases, supply chain issues are likely driving shoppers into stores in search of products they can’t find online: several retailers have witnessed notable surges in foot traffic since the summer and leading up to Black Friday when compared to last year. In particular, electronics stores saw a 36% increase in foot traffic in late 2021, compared to a 24% increase in 2020. Hardware and home/furniture stores also garnered similar upticks in customers eager to peruse in person, given the increasingly empty virtual shelves.
  3. Shoppers cannot one-stop-shop. Not only are supply chain issues forcing shoppers to buy in-store; shoppers are scouring multiple stores in search of the products they need. Between August and mid-November 2021, the average big box shopper visited 1.5 distinct big box chains (a 7% increase from 2020); electronics shoppers stopped by 1.37 different electronics retailers (a 7.5% increase from 2020); hardware/home improvement shoppers visited 1.91 distinct chains (a 5% increase from 2020). Compared to the same time frame last year, this contributed to an overall 5-8% increase in the number of chains shoppers visited across these three categories. Gone are the days of one-stop shopping, which was a major trend just last year: when we can’t find what we’re looking for online, or on our preferred retailer’s shelves, we’re looking elsewhere. While supply chain issues persist, we can expect this cross-shopping trend to continue into 2022.
  4. Brand loyalty is at stake. Cross-shoppers aren’t wasting any time: data shows that consumers are increasingly visiting direct competitors within the same day—especially hardware and big box stores. For example, roughly 15% of Target shoppers also visited a Walmart store within 24 hours (a 3.3 % point increase from last year), and similar trends are visible between competitors in various categories, such as Lowe’s/Home Depot. This increased tendency to shop around could lead customers to begin their holiday shopping earlier in the year to avoid sell-outs, and could take a lasting toll on existing brand loyalty. To combat this, retailers will need to accommodate these stocking issues by adapting staffing and inventory planning, as well as offering deals to compete with rival companies. That said, there are already signs of retailer evolution: pre-pandemic, stores opened earlier and earlier on Thanksgiving Day to kick off Black Friday sales; throughout 2020 and 2021, the majority of big retailers stayed closed on Thanksgiving Day, instead launching deals earlier in the week to spread out demand and minimize crowds.

In this brave new world of holiday shopping, location data has become increasingly essential for understanding who retail shoppers are, and how their behavior changes over time. For those retailers whose New Year’s resolutions include optimizing business and maintaining brand loyalty, these insights are essential for a successful 2022. As for smart shoppers: paying attention to key retail trends will help you avoid crowds without missing out on products. When it comes to becoming a better gift-giver, there’s no time like the present.

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