The pandemic’s burden on the retail sector has been massive and there has been much discussion rightfully centered around sales and performance. Yet, coronavirus has affected the way consumers shop as well in ways that will create long-lasting impacts. At Placer.ai, we use mobile analytics to track things like retail trends. Three particular changes stand out when looking at our data that all point to more value being placed on large retail stores. The big question is, are these changes just temporary shopping patterns, or do they signify a sea change in consumer behavior?
While going shopping once presented many possibilities, including the option to “shop around,” COVID-19 has pushed us to shop only when we absolutely must—and to do it fast. Leisurely shopping is less an option, and popping over to multiple places on the way home is no longer as attractive as it once was. This rise of mission-driven shopping cannot be ignored, especially when looking at two of the pandemic’s strongest performers, Walmart and Target.
We examined shopping patterns for Walmart and Target during March and April and compared it to behavior from the same months last year and found some important differences. In 2019, 40.7 percent of customers who visited a Walmart nationwide came immediately from home. Unsurprisingly, this number shot up to 56.9 percent for March and April 2020 as a result of stay-at-home measures. Interestingly, the length of the trip was not heavily affected, empowering brands with wider offerings to potentially sell more in each visit as multiple-stop shopping trips declined.
For shopping center owners, the impact here cannot be understated. The drop in non-grocery retailer cross-shopping signifies a need for more targeted promotion to get customers into different types of stores. And with the role of big-box retailers becoming increasingly prominent, other retailers in big-box anchored centers need to adjust strategies in order to reap the benefits, as opposed to building on cross-shopping.
Flattening Visit Distribution
The times and days people visit retailers have also been hugely affected by stay-at-home measures. Walmart, again, saw significant increases in midday visits at the expense of evening and night visits. In fact, every hour between 9 am and 5 pm saw a significant jump during March and April in 2020.
A similar trend can be seen with Target in 2019 and 2020. Saturday visits dropped from 22.7 percent of overall traffic, while Mondays and Tuesdays saw increases of nearly 1 percent, and Wednesday and Thursday visits rose by 2.5 and 2.7 percent respectively.
Pet giant PetSmart also experienced a boost to weekday traffic and a slight decrease in weekend visits. Saturday visits dropped from 22.9 percent to 18.8 percent of weekly visits, with Monday through Thursday visits rising.
These new shopping patterns are something that retailers may need to adjust to if the work from home trend persists post-pandemic. As shopping peaks are blurred and traffic becomes steadier throughout the day and week, the impact on staffing and behavior could be significant. Increasingly distributed traffic at a more regular rate would mean more opportunities for grocery and mass merchandise-anchored shopping centers to attract customers into other stores outside of peak times – this would shift parking and shopping patterns. The result could present opportunities and obstacles enabling other retailers to push for weekend traffic or to align themselves with the changing patterns.
With more time spent around the house comes the opportunity to fix the place up. And people are certainly taking advantage of it. The magnitude of this newly emerged self-sufficiency DIY trend is most apparent when looking at Lowe’s and Home Depot traffic. Lowe’s was even able to drive year-over-year first-quarter growth despite the pandemic, positioning it as a strong competitor in this sector.
The third week of April was actually Home Depot’s third-best week since 2019. Lowe’s really hit it out of the park that same week, with a 71.8 percent increase in visits over the baseline for that period. With competition tighter than ever between the two brands, coronavirus is undeniably the catalyst in their unprecedented strong performances.
If the DIY trend continues we could see these large stores start to become more of a focal point for shopping trips and even start to break into new categories like electronics or home goods.
The coronavirus has disrupted our lives and our economy but there are significant economic opportunities that may come from the massive social changes it caused. One of these could be an increase in the value of larger stores, reversing a long-standing shift in preference to smaller, more centrally located retail locations To explore more data about the coronavirus’s incredible impact on the current and future retail landscape join our VP Marketing, Ethan Chernofsky, with guests Chris Walton, CEO of Omni-Talk, Third Haus and Archer Retail, and Mike Rielly, Managing Principal, Signature Group at SRS Retail Partners on Tuesday, May 19th for a live webinar, Consumer Behavior: How It’s Changed and Will the Changes Last.