As retailers continue to experience growth, they can take advantage of foot traffic analytics to gain insights into consumer shopping habits and spending patterns. This information can be particularly valuable for brands without physical stores, as they can leverage third-party foot traffic analytics to improve visibility and operations.
During times of economic uncertainty, understanding different consumer segments becomes crucial for consumer-facing companies. By delving into consumer characteristics and behaviors at a store, chain, or regional level, retail stakeholders can stay ahead of the competition and tailor their product offerings and promotions accordingly.
The impact of inflation-driven prices has led to a division in shopping habits between lower and higher-income households. Lower-income households prioritize value and shop at multiple retailers, while higher-income households tend to gravitate towards mid-range retailers and specialty grocery stores, often located in suburban areas. It is essential for consumer-facing companies to grasp which audience segments are still willing to spend and which are cutting back, especially during uncertain economic periods.
The post-work shopping trip has undergone significant changes due to the increasing popularity of flexible work arrangements. According to the American Opportunity Survey by McKinsey & Company, 58% of Americans have the opportunity to work from home at least once a week, with 35% having the option to work fully remotely. This shift has impacted retail behavior, with many retailers now focusing on after-work shoppers as a target demographic.
Analyzing shopper visits to CVS between 6 and 9 PM, Placer.ai observed a growth in foot traffic during these hours. The percentage of shoppers visiting CVS from their workplace increased by 3.9% in Q1 2023, while the share of shoppers returning home after a CVS visit increased by 5.5%. These findings suggest that retailers experiencing a surge in post-work foot traffic have an opportunity to customize their promotions and offerings to align with the needs of these consumers who make a stop on their way home.
Discount retailers are benefitting from the shifting consumer behavior caused by rising grocery prices. Dollar General, for example, has expanded its presence into urban and suburban areas, recognizing the demand from value and convenience-oriented shoppers. By offering kitchen staples, shelf-stable foods, produce, and publishing dinner recipes on its website, Dollar General caters to these customers. Additionally, a significant percentage (55%) of shoppers are turning to private label products for their affordability, quality, taste, perceived health benefits, and sustainability.
For retailers, private label products offer a built-in competitive advantage. Leveraging their existing supply chain and distribution networks enables retailers to navigate product shortages and inflationary price pressures effectively. This strategic use of private label products not only enhances brand recognition and shopper loyalty but also ensures a seamless shopping experience for consumers.
In conclusion, understanding consumer behavior through foot traffic analytics and adapting to changing shopping patterns is vital for retailers in today’s competitive market. By tailoring product offerings, promotions, and operations, retailers can stay ahead of the competition and meet the evolving needs of consumers.
