.svg)
Of all the predictions about what would be the prevailing retail trends in 2024, an uncharacteristic cold snap wasn’t on anyone’s radar. But so far this year, extreme weather has had a major impact on consumer behavior in a host of retail categories. How big an influence have drastic conditions had on foot traffic and what visit patterns are emerging as temperatures thaw? We dove into the latest location analytics to find out.
A powerful Arctic blast gripped a large portion of the continental U.S. in January 2024. And along with other disastrous consequences, the chill caused many consumers to stay indoors – resulting in a decline in overall retail visits.
Although retail foot traffic the week of January 8th, 2024 was almost in line with 2023 levels – likely due to a flux of consumers stocking up on essentials – the week of January 15th saw the overall retail visits gap widen to 2.9% year-over-year (YoY) as the storm expanded its grip on the country.
The worst of the cold abated in late January 2024, and consumers appeared to be out and about again – catching up on errands and making up for time spent cooped up at home. Overall retail visits picked up steam the week of January 22nd, 2024 and sustained positive YoY growth through February.
.png)
Zooming in on retail foot traffic by state revealed the scope of the storm’s impact on visits nationwide. Generally, states that bore the brunt of the cold blast saw the widest YoY retail visits gaps. And although perennial cold weather regions were not spared from the unusual cold spell, consumers in the often frigid Upper Midwest and Northeast may have been more acclimated to the cold and therefore able to maintain somewhat normal shopping routines.
In January 2024, Montana, Wyoming, the Dakotas, and Minnesota – along with Maine, Vermont, and New Hampshire – all experienced YoY retail visit growth, despite the extreme weather. Meanwhile, foot traffic in much of the Midwest and South buckled under the abnormal conditions.
The resilience of the Upper Midwest and the Northeast was evident again as temperatures thawed. While winter weather was still prevalent in these parts, North Dakota, Minnesota, Wisconsin, Maine, and Vermont all cozied up to over 8.0% YoY retail visit growth in February 2024.
As was the case for retail foot traffic patterns as a whole, the cold snap took a toll on visits to the dining space early on in 2024. The data suggests that many consumers stayed home and cut back on dining out during the extreme storm. But as temperatures more or less normalized, restaurant-goers were eager to get back to their favorite dining hot spots.
Analysis of weekly foot traffic to the various dining categories in January and February 2024 once again showcased the industry’s resilience and the strength of discretionary spending as a whole.
.png)
Diving into dining foot traffic on the state level provided further evidence that freezing conditions likely influenced the eating-out behavior of consumers.
Location analytics revealed that as storms raged in January 2024, southern and midwestern states – where consumers may have been caught off guard by the extreme weather – experienced the widest YoY dining visit gaps. Meanwhile, upper midwestern and northeastern states – where consumers are generally accustomed to harsher winters – produced dining traffic growth.
In February 2024 – as temperatures warmed – several states in the Upper Midwest and Northeast mustered exceptional increases in YoY dining visits. But notably, all of the continental U.S. saw YoY dining traffic growth during that month – further indication of the dining space’s ability to bounce back from adversity and the sustained demand for going out.
Which retail trends will prevail as 2024 progresses? Visit Placer.ai to find out.
This blog includes data from Placer.ai Data Version 2.0, which implements improvements to our extrapolation capabilities, adds short visit monitoring, and enhances visit detection.
With the first round of earning announcements in 2024 coming to a close, we dove into the foot traffic data to find out which companies are likely to surpass their 2023 performance in the coming year.
Following a challenging period and shifts in apparel consumer preferences hampering traffic, Gap’s performance is on the upswing. The company, which operates four iconic brands – Gap, Old Navy, Athleta, and Banana Republic – recently announced stronger-than-expected Q4 2023 results, driven by strong performances of the Gap and Old Navy brands.
Foot traffic data also points to a comeback. The Old Navy and Gap managed to maintain minimal year-over-year (YoY) visit gaps in 2023 despite the challenging retail environment, with Q4 visits – during the critical holiday season – down just 2.3% and 1.7% for the two brands, respectively.
Gap’s turnaround is likely helped by several C-suite personnel changes at the company. Last year, Gap Inc. brought in C.E.O. Richard Dickson from Mattel to revitalize the legacy brands, and Chris Blakeslee – previously at Alo Yoga – was chosen to lead the Athleta chain. And the company is continuing its series of high-profile hirings in 2024 with the appointment of designer Zac Posen as Creative Director of the company and Chief Creative Officer of the Old Navy banner. Should Gap continue on its current track, the company is well-positioned for a strong 2024.
.png)
Monthly visits to The Cheesecake Factory fell YoY for much of last year, with the chain’s foot traffic regularly lagging behind the wider Restaurant category. But the gaps between the wider industry performance and visits to the brand began to narrow towards the end of the year, with The Cheesecake Factory beating out the overall Restaurant industry in terms of YoY traffic in December 2023. And although January 2024’s cold spell brought visits back down, foot traffic rose again in February 2024.
The chain has announced plans to expand its store count this year and intends to implement moderate price hikes to offset rising costs. And if the positive foot traffic trends continue alongside the company’s new unit openings and price increases, The Cheesecake Factory may well outpace its 2023 performance in 2024.
.png)
The pet care sector thrived over the pandemic, as the combination of shelter-in-place orders, stimulus checks, and reduced spending channels drove consumers to shower their pets with love in the form of increased spending at pet stores. But the economic headwinds of the past two years led some shoppers to reduce their discretionary spending. Some consumers have gone as far as surrendering their pets in an effort to cut costs, with the tighter consumer budgets impacting visits to leading pet care retailers, including Petco. And to add to an already challenging situation, the pet care landscape has recently become even more competitive, with Walmart recently making more aggressive inroads into the space.
But Petco is fighting to stay on top, with the company continuing to invest in its veterinary program and optimize its product assortment to keep up with the changing preferences of 2024 consumers. And recent foot traffic data indicates that Petco’s strategy may be bearing fruit. Visits to Petco grew 1.8% and 4.0% YoY in November and December 2023, respectively – indicating that many pet owners still splurged on holiday gifts for their beloved pets and turned to Petco for the perfect treat or toy. And although January 2024’s unusual cold spell drove a visit lag, foot traffic quickly stabilized in February – indicating that the company should not be written off quite yet.
.png)
For more retail and dining insights, visit our blog at placer.ai.
This blog includes data from Placer.ai Data Version 2.0, which implements improvements to our extrapolation capabilities, adds short visit monitoring, and enhances visit detection.
In February 2024 Placer.ai released two white papers: 10 Top Brands to Watch in 2024 and Q4 2023 Quarterly Index. Below is a taste of our findings. To read more data-driven consumer research, visit our library.
The Q4 2023 Quarterly Index white paper analyzed the foot traffic performance of the Fitness, Beauty & Self Care, Discount & Dollar Stores, Superstores, Grocery Stores, and Dining categories in 2023 and during last year’s all-important holiday shopping season.
Last year ended on a high note for many retailers, with cooling inflation and rebounding consumer confidence contributing to a robust holiday season. Still, 2023 was a year of headwinds for the sector, as consumers traded down and cut back on unnecessary indulgences.
In the midst of these challenges, some segments thrived. Continued prioritization of health and wellness by consumers drove strong visit growth for the Fitness and Beauty & Self Care segments – which emerged as 2023 winners and enjoyed positive foot traffic growth in Q4. At the same time, price consciousness drove foot traffic to Discount & Dollar Stores and Superstores, both of which made inroads into the affordable grocery space during the year.
The Grocery category, too, saw a 4.3% jump in visits last year compared to 2022, as well as a slight uptick in Q4 visits. And even the discretionary Dining sector held its own, with a 2.1% year-over-year (YoY) annual increase in foot traffic, and a Q4 quarterly visit gap of just 1.8%.
For a deeper dive into the Q4 2023 performance of these sectors, read the full report.
.png)
The 10 Top Brands to Watch in 2024 white paper leveraged up-to-date location intelligence and consumer demographic insights to identify ten brands gearing up for growth in 2024 – one of which was Foxtrot Market.
Convenience stores have evolved into bona-fide dining destinations. And Foxtrot, a Chicago-based chain with 29 stores across Texas, Illinois, Washington, Maryland, and Virginia, is one of the brands redefining what a convenience store can be. The chain offers an upscale convenience store experience and is particularly known for including local brands in its product assortment as well as its excellent wine curation and dining options.
And location intelligence data indicates that Foxtrot knows its audience – visitors to the chain were significantly more likely to fall into AGS: Behavior & Attitudes dataset’s “Wine Drinker” or “Nutritionally Aware” segments than visitors to nearby convenience stores. The company plans to ramp up store openings, particularly in the suburbs, where convenience and a good bottle of wine might just find the perfect home as a welcome distraction from the daily grind.
To find out the other brands on the list, read the full report.
.avif)
For more data-driven consumer research, visit our library.
This blog includes data from Placer.ai Data Version 2.0, which implements improvements to our extrapolation capabilities, adds short visit monitoring, and enhances visit detection.
Discount and dollar stores flourished in 2022 and 2023, as rising prices led many shoppers to trade down and tighten their purse strings. Consumers flocked to dollar stores for everything from essential goods to discretionary items like toys and party supplies. And while some chains – including category leader Dollar General – were buoyed by their growing positioning as low-cost grocery venues, others found success by leaning into the affordable luxury space. Brands like Five Below, Ollie’s Bargain Outlet, and pOpshelf (owned by Dollar General) grew their audiences by offering price-conscious consumers easy access to inexpensive non-necessities.
But how did these specialty discount retailers fare in the all-important fourth quarter of 2023 – and what does their early 2024 performance portend for the rest of the new year?
We dove into the data to find out.
Five Below, the bargain chain specializing in low-cost, recreational merchandise, wrapped up 2023 with a bang. Between September and December 2023, the brand saw year-over-year (YoY) monthly visit increases ranging from 14.6% to 22.1%. And while Five Below’s expanding store count has likely helped fuel this surge, the indulgence-oriented retailer is also attracting shoppers with a growing selection of “Five Beyond” products, priced above the chain’s traditional $5.00 ceiling. Last year, Five Below further cemented its status as a key holiday shopping destination – another factor driving its impressive Q4 2023 performance. And the discounter continued its winning streak into the new year, with strong performance in January and February 2024.
Ollie’s Bargain Outlet operates according to a somewhat different strategy – enticing shoppers with a broad selection of highly discounted name-brand merchandise. Ollie’s offerings include lower-ticket items like food and books, but also a wide range of premium products like electronics and home furnishings. And Ollie’s closeout buying model means that shoppers never know exactly what they’re going to find – turning each trip into something of a treasure hunt. Like Five Below, Ollie’s Bargain Outlet has expanded its physical presence in recent years – and the chain’s consistent positive YoY foot traffic growth highlights its continued appeal to today’s consumers.
.avif)
Dollar General’s pOpshelf concept – launched in late 2020 with a discretionary-focused product mix aimed at higher income shoppers than the company’s flagship brand – now boasts some 240 locations across 20 states. And as the chain has expanded its footprint, it has also grown its audience. Like other affordable luxury venues, pOpshelf experiences large visit spikes during the fourth quarter of the year, as shoppers seek out inexpensive gifts and other holiday fare.
As of February 2024, visits to the chain were up 190.1% compared to a March 2022 baseline. Though Dollar General has reined in the pace of pOpshelf’s expansion to account for what remains a challenging retail environment, the company still plans to open more stores this year. And if pOpshelf’s strong visit trajectory is any indication, investing in the concept’s long-term strength may well bear fruit in the months and years ahead.
.png)
Each of these discount chains has found success by appealing to a different audience. Ollie’s Bargain Outlet, with its constantly-shifting closeout inventory, attracts shoppers from areas with higher shares of singles and fewer families with children. Five Below’s and pOpshelf, on the other hand, feature captured markets with larger shares of parental households than of singles – though pOpshelf’s share of the latter has risen over the past year, as the chain expanded into new markets.
For all three chains, however, the extent of the gap between the two demographic groups varies throughout the year – with the share of singles increasing during the summer and the share of parental households seeing an uptick during the December holiday shopping season. (For pOpshelf, this pattern began to emerge in 2023). Five Below experienced a particularly pronounced version of this trend – with the share of singles frequenting the chain actually outpacing the share of families with children each August. This uptick in the share of singles visiting discount chains – especially Five Below – may be due in part to back-to-school shopping by college students, many of whom load up on dorm supplies towards the end of summer.
%20(1).png)
Specialty discount chains offer price-conscious shoppers affordable outlets for retail therapy. And in 2023 and early 2024, Five Below, Ollie’s Bargain Outlet, and pOpshelf grew their audiences by appealing to the perennial quest for inexpensive, fun shopping experiences. How will these retailers continue to fare as 2024 wears on? Will cooling inflation put a dent in their gains – or will a revitalized discretionary retail environment propel them forward?
Follow Placer.ai’s data-driven retail analyses to find out.
This blog includes data from Placer.ai Data Version 2.0, which implements improvements to our extrapolation capabilities, adds short visit monitoring, and enhances visit detection.
Mercado Gonzalez: This Mexican Food Hall is a Magnet
Mercado Gonzalez opened less than six months ago, and boy, is it making a splash! This marketplace/food hall located in Costa Mesa, CA hosts 20 food stalls where one can stroll through, buy colorful produce, and imagine that one is at the Mercado de Coyoacan in Mexico City, one of various mercados from which this location takes inspiration. Already, we see from the Placer data below that since opening in mid-November (just in time for the holidays!), Mercado Gonzalez is proving to be one of the most-visited locations in the Northgate Gonzalez portfolio.
The weekend spikes really stand out as patrons from all over Southern California come to partake of pan dulces, aguas frescas, and oh-so-delectable hot and fresh churros at Churreria El Moro.
We wrote about food fusion last week, and indeed, in addition to traditional Mexican specialties like tortas ahogadas at Chiva Torta, one can also find Mexican-style sushi at Sushi El Sinaloense. From street food to gourmet at Maizano and Entre Nos, one has options that run the gamut from hot tortillas to cochinita pibil with fresh masa.
This food hall extravaganza bills itself as the “ultimate destination for Mexican food and culture” and it appears that customers who travel from a trade area of over 150 miles are in total agreement.
Compared to another top–trafficked Northgate Gonzalez market in Los Angeles, which draws from a much more local crowd of 11 sq miles (keep in mind, there are numerous Northgate Gonzalez markets across the Southern California landscape), this novel food hall concept attracts a much more diverse audience, across multiple dimensions like geography, ethnicity, and household income.
While the traditional grocery store attracts heavily from the segment of Lower Hispanic Families at the Los Angeles and San Diego locations, and also from Near-Urban Diverse Families and Young Urban Singles in San Diego, the segment data from Spatial.ai: PersonaLive reveals that Mercado Gonzalez also brings in Young Professionals, Educated Urbanites, Wealthy Suburban Families, and Ultra Wealthy Families.
In addition, the average HHI of those visiting Mercado Gonzalez is roughly twice that of the other Northgate Gonzalez grocery stores.
The food hall also attracts a broader swath of ethnicities.
Much like Eataly before it, Jose Andres’ Spanish Mercado Little Spain, or Asian food halls that we wrote about recently in our Lunar New Year articles, there is enthusiastic appetite for an immersive encounter reminiscent of being in another country and having access to authentic flavors and eating experiences.
Despite the inflationary headwinds that marked 2023, year-over-year (YoY) foot traffic to Indoor Malls and Open-Air Shopping Centers exceeded 2022 levels every quarter of 2023, with the two shopping center formats competing head-to-head for the top spot: Open-Air Shopping Centers outperformed Indoor Malls during the first three quarters of the year, but Indoor Malls came out ahead during the critical holiday-focused Q4. Ultimately, overall yearly visit numbers slightly favored Open-Air Shopping Centers, which finished 2023 with a 3.0% overall YoY increase in visits compared to 2.9% overall growth for Indoor Malls.
Meanwhile, Outlet Malls struggled to keep up with the other two formats. This segment saw a 1.6% YoY decline in yearly visits in 2023, perhaps due consumers looking to save on gas expenses and avoid the typically longer driving time required to get to these types of shopping centers.
.png)
Visits to all three mall formats dipped YoY in January 2024, likely due to the extreme cold temperatures that swept through much of the country and to the challenging comparisons to a strong January 2023.
But YoY foot traffic to Indoor Malls and Open-Air Shopping Centers swung positive in the second months of the year. Visits to Indoor Malls grew an impressive 6.0% relative to the same month in 2023, and foot traffic to Open-Air Shopping Centers increased 3.9% in the same period. The YoY visit gap to Outlet Malls also narrowed significantly, with foot traffic to the format just 1.6% lower than it was in February 2023, indicating that – despite predictions – 2024 consumers are still willing to spend on discretionary categories.
.png)
While visits to the mall space appear to be generally growing on a YoY basis, comparing the foot traffic performance to pre-COVID visits levels reveals a more nuanced picture. Of the three shopping centers formats, Open-Air Shopping Centers drew closest to pre-COVID levels, with 2023 visits just 1.5% lower than they were in 2019. The visit gap to Indoor Malls was slightly larger, with the format attracting 4.6% fewer visits in 2023 than in 2019. And Outlet Malls appear to be having the toughest recovery, with 2023 visits to the format 9.7% lower than in 2019.
But just because visits to the shopping center space are still catching up to 2019 levels does not mean that all is lost – a deeper dive into location intelligence data indicates that post-pandemic shopping habits are still in flux.
.png)
Analyzing shifts in shopping behavior in recent years reveals that many shoppers are still returning to pre-COVID behaviors. For example, comparing the share of shopping center visits between the hours of 12 PM and 4 PM in 2019, 2022, and 2023 indicates that the “new normal” of mid-day shopping sprees is on its way out.
The share of hourly visits between 12 PM and 4 PM jumped over the pandemic thanks to consumers’ newly flexible schedules, and mid-day foot traffic to shopping centers was still higher in 2022 compared to pre-COVID. But the relative share of mid-day visits dropped from 2022 to 2023 and moved closer to 2019 levels – indicating that shopping patterns have not yet reached a post-COVID equilibrium.
Critically, there appears to be a correlation between the return to 2019 shopping patterns and the visit recovery rate. Visits to Open-Air Shopping Centers in 2023 were almost on par with 2019 levels, and the format’s mid-day visit share was only half a percentage point higher in 2023 than in 2019. The mid-day visit share at Indoor Malls, where the year-over-four-year (Yo4Y) visit lag was slightly larger than for Open-Air Shopping Centers, was still 1.9 percentage points higher in 2023 when compared to 2019. And Outlet Malls had the largest Yo4Y visit gap along with the largest Yo4Y difference in mid-day visit share.
This data indicates that post-pandemic shopping patterns are still dynamic – and even retail sectors that appear to have permanent COVID scars may well bounce back as consumer behavior continues to normalize.
.png)
Despite predictions of slower consumer spending, foot traffic data indicates that demand for malls and shopping centers remains stable. Location intelligence showing strong monthly visit numbers and positive shifts in shopping behavior indicates that the shopping center space is off to a strong start in 2024.
For more data-driven retail insights, visit our blog at placer.ai.
This blog includes data from Placer.ai Data Version 2.0, which implements improvements to our extrapolation capabilities, adds short visit monitoring, and enhances visit detection.
Return-to-office (RTO) trends have been closely watched over the past few years, with relevant stakeholders trying to puzzle out the impact remote and hybrid work have had on business operations and worker performance. And while visits to office buildings, overall, remain below pre-pandemic levels, office recovery varies from city to city – reflecting the complex and nuanced nature of regional economic trends, workforce preferences, and industry-specific needs.
This white paper harnesses location analytics to explore office recovery in the country’s second-largest economy – Los Angeles. The first part of the report is based on an analysis of foot traffic data from Placer.ai’s Los Angeles Office Index – an index comprising 100 office buildings in LA (including several in the greater metro area). The second part of the report broadens the lens to analyze visits by local employees to points of interest (POIs) corresponding to four major LA-area office districts: Century City, Downtown LA, Santa Monica, and Culver City. The white paper examines the impact that return-to-work mandates have had on visits to office buildings, discovers which demographic groups are driving the RTO, and explores the connection between commute time and return-to-office rates.
The return to office in Los Angeles has consistently lagged behind other major cities, underperforming nationwide recovery levels since the pandemic ground in-office work to a virtual halt. Still, the city’s office buildings are seeing a steady increase in visits, with foot traffic tending to spike at the beginning of each year. This indicates that even though office visits in LA are still below national averages, they are on a steady growth trajectory – a promising sign for stakeholders in the city.
A closer examination of Los Angeles office buildings also shows that despite the overall lag, some top-performing buildings in the LA metro area are defying the odds. Visits to the 20 local office buildings with the narrowest Q2 2024 post-COVID visit gaps were down just 8.7% in June 2024 compared to January 2019 – significantly outperforming the nationwide average.
So while overall office recovery in the city is still behind nationwide trends, these top-performing buildings indicate an optimistic outlook for the city’s office spaces.
Diving into the demographics of visitors to LA’s top-performing office buildings reveals an important insight: these buildings are attracting younger workers. This cohort has shown a stronger preference for in-person work compared to their older colleagues.
Analyzing the buildings’ captured markets with psychographics from AGS: Panorama reveals that these buildings are attracting visitors from areas with larger shares of "Emerging Leaders" and "Young Coastal Technocrats" than the broader metro area.
"Emerging Leaders'' – upper-middle-class professionals in early stages of their careers – make up 20.3% of households in the trade areas feeding visits to these top-performing buildings, compared to 14.9% in the broader LA CBSA. Similarly, "Young Coastal Technocrats," young and highly educated professionals in tech and professional services, account for 14.7% of households driving visits to the top-performing buildings, compared to only 12.1% in the broader area.
The trend suggests that companies in these high-performing office buildings employ many early-career professionals eager to accelerate their careers and work in-person with colleagues and mentors. This is a positive sign for the future of the office market in the LA metro area, indicating that it is attractive to key demographic groups that are likely to drive future growth and innovation.
Over the past few years, the debate regarding return-to-office mandates has been a heated one. Will employees follow return-to-office requirements? Can companies enforce the return to office after offering remote and hybrid work options? Recent location analytics data suggests that, at least in the Los Angeles metro area, some return-to-office mandates have been effective.
Three major tech companies – Activision Blizzard, TikTok, and SNAP Inc. – recently made their return-to-office policies stricter. Activision mandated a full return to the office in January 2024. TikTok has also intensified its return-to-office policy while seeking to expand its office presence in the greater Los Angeles area. And SNAP Inc. required employees to return to the office earlier this year as a condition of continued employment.
Visitation patterns at each of these companies' respective headquarters suggest that their policies have directly impacted visit frequency. Since the beginning of the year, the share of repeat office visits (defined as two or more visits per week) has increased for all three locations. Activision saw its share of repeat office visits grow from 52.1% in H1 2023 to 61.4% in the same period of 2024. TikTok’s repeat visits grew from 49.5% to 61.0%, and SNAP’s repeat visits increased from 36.6% to 42.8%.
These numbers highlight how return-to-office policies can lead to noticeable changes in office visit patterns and offer a blueprint to other businesses looking to foster a stronger in-office workforce.
Los Angeles is the second-largest metro area in the country, with several distinct business districts across its sprawling landscape. And a closer look at four major office hubs in the greater LA area – Century City, Downtown LA, Santa Monica, and Culver City – highlights how the office recovery can vary, not just by city or demographic, but on a neighborhood level.
Weekday visits by local employees to all four analyzed business districts have rebounded significantly since 2020 – though each area has followed its own particular trajectory.
Culver City, home to major businesses including Sony Pictures and Disney Digital Network, saw the least pronounced drop in employee visits during the early days of the pandemic. And in Q2 2024, weekday visits by local workers were down just 18.4% compared to Q1 2019.
Century City, on the other hand, saw the most marked drop in local employee foot traffic as the pandemic set in. But the district’s recovery trajectory has also been the most dramatic – with a Q2 2024 visit gap of just 28.5%, smaller than Downtown LA’s 29.7% visit gap. Perhaps capitalizing on this momentum, Century City is expanding its business district with the addition of a major new office building, set to be completed in 2026 and serve as the headquarters for Creative Artists Agency. Santa Monica, for its part, finished off Q2 2024 with a 23.3% visit gap.
Century City stands out within the Los Angeles metropolitan area for its dramatic decline and subsequent resurgence in local employee foot traffic. And looking at another metric of office recovery – employee commute distance – further underscores the district’s remarkable comeback.
The share of employees commuting to Century City from three to seven miles away has nearly returned to pre-COVID levels – suggesting a normalization of commuting patterns by local workers living in the area. In H1 2019, 33.5% of workers in Century City commuted between 3 and 7 miles to work; in 2022, that number had dropped to 29.8%. But by 2024, the share of visitors making that commute had grown to 32.5% – much closer to pre-COVID numbers.
Similarly, the region’s trade area size, which had contracted significantly in the wake of the pandemic, bounced back significantly in 2024. This serves as another indication of Century City’s rebound, cementing Century City’s status as a key business hub within the Los Angeles metropolitan area.
Five years after the upheaval caused by the pandemic, office spaces are still changing. Although the Los Angeles area has taken longer to recover than other major cities, analyzing local visitation data shows significant potential for the city’s business areas. With young employees leading the return-to-office charge, the city is poised to keep driving its strong economy and adjust to an evolving office environment.
Retail media networks (RMNs) have cemented their roles as the future – and present – of advertising. These networks enable advertisers to promote products and services through a retailer’s online properties and physical stores, when consumers are close to the point-of-purchase and primed to buy.
Today, we take a closer look at two newcomers to the retail media space: Costco Wholesale and Wawa. Both chains have an online presence – but both also excel at in-store experiences, offering unique opportunities for consumer engagement and exposure to new products.
This white paper dives into the data to explore some of the key advantages Costco and Wawa bring to the retail media table – and examine how the retailers’ physical reach can best be leveraged to help advertising partners find new audiences.
Wawa and Costco, the latest additions to the growing number of companies with retail media networks, exhibit significant advertising potential. Both brands boast a wide reach and diverse customer base, and both have access to troves of customer data through membership and loyalty programs.
Foot traffic data confirms the robust offline positioning of the two retailers. In Q1 2024, year-over-year (YoY) visits to Costco and Wawa increased 9.5% and 7.5% respectively – showing that their in-store engagement is on a growth trajectory.
And since consumers tend to spend a lot more time in-store than they do on retailers’ websites, Costco’s and Wawa’s strong brick-and-mortar growth positions them especially well to help advertisers reach new customers. In Q1 2024, the average visits to Costco’s and Wawa’s physical stores lasted 37.4 and 11.4 minutes respectively – compared to just 6.7 and 4.6 minutes for the chains’ websites. These longer in-store dwell times can be harnessed to maximize ad exposure and offer partners more extended opportunities for meaningful interactions with customers. Partners can also analyze the behavior and preferences of the two chains’ growing visitor bases to craft targeted online campaigns.
Costco’s retail media network will tap into the on- and offline shopping habits of its staggering 74.5 million members to inform targeted advertising by partners. And the retailer’s tremendous reach offers a significant opportunity to engage customers in-store.
But while Costco is dominant in some areas of the country, other markets are led by competitors like Sam’s Club and BJ’s Wholesale Club. And advertisers looking to choose between competing RMNs or hone in on the areas where Costco is strongest can analyze Costco's performance and visit share – on a local or national level – to determine where to focus their efforts.
An analysis of the share of visits to wholesalers across the country reveals that Costco is the dominant wholesale membership club in much of the Western United States. But Costco also captures the largest share of wholesale club visits in many other major population centers, including important markets like New York, Chicago, Phoenix, and San Antonio. Costco’s widespread brick-and-mortar dominance offers prospective advertising partners a significant opportunity to connect with regional audiences in a wide array of key markets.
Another one of Costco’s key advantages as a retail media provider lies in its highly loyal and engaged audience. In May 2024, a whopping 41.4% of Costco’s visitors frequented the club at least twice during the month – compared to 36.6% for Sam’s Club and 36.0% for BJ’s Wholesale.
Moreover, Costco led in average visit duration compared to its competitors. In May 2024, customers spent an average of 37.1 minutes at Costco – surpassing even the impressive dwell times at Sam’s Club and BJ’s Wholesale Club.
YoY visits per location to Costco, too, were the highest of the analyzed wholesalers, all three of which saw YoY increases. These metrics further establish the wholesaler’s position as an effective retail media provider.
Even when foot traffic doesn't show a brand’s clear regional dominance, location analytics can reveal other metrics that signal its unique potential. Take the Richmond-Petersburg, VA, designated market area (DMA), for example. In May 2024, BJ’s Wholesale Club led the DMA with 41.2% of wholesale club visits, while Costco was a close second with 37.3% of visits.
But despite BJ’s lead in visit share, Costco's Richmond audience was more affluent. Costco's visitors came from trade areas with a median household income (HHI) of $93.2K/year, compared to $73.1K/year for Sam’s Club and $89.5K/year for BJ’s. Additionally, Costco drew a higher share of weekday visits than its counterparts.
Analyzing shopper habits and preferences across chains on a local level can provide crucial context for strategists working on media campaigns. Advertisers can partner with the brands most likely to attract consumers interested in their offerings, and identify where – and when – to focus their advertising efforts.
Convenience stores, or c-stores, are emerging as destinations in and of themselves – and their rising popularity among a wider-than-ever swath of consumers opens up significant opportunities in the retail advertising space.
Wawa is a relative newcomer to the world of retail media, after other c-stores like 7-Eleven and Casey’s launched their networks in 2022 and 2023. But despite coming a bit late to the party, the potential for Wawa’s Goose Media Network is significant – thanks to a cadre of highly loyal visitors who enjoy the physical shopping experience the c-store chain offers.
In May 2024, Wawa’s share of loyal visitors (defined as those who visited the chain at least twice in a month) was 60.1%. In contrast, other leading c-store chains operating in Wawa’s market area – QuickTrip and 7-Eleven, for example – saw loyalty rates of 56.0% and 47.9%, respectively, for the same period.
Additionally, Wawa visitors browsed the aisles longer than those at other convenience retailers. In May 2024, 39.9% of Wawa visitors stayed in-store for 10 minutes or longer, compared to 29.6% at QuickTrip and 25.7% at 7-Eleven.
Wawa's loyal customer base and longer visit durations make it a strong contender in the retail media space. By harnessing this high level of customer engagement, Wawa can draw in advertisers and develop targeted marketing strategies that resonate with its dedicated shoppers.
Wawa has been on an expansion roll over the past few years, with plans to open at least 280 stores over the next decade in North Carolina, Tennessee, Georgia, Alabama, Ohio, Indiana, and Kentucky. The chain has also been steadily increasing its footprint in Florida – between January 2019 and April 2024, Wawa grew from 167 Sunshine State locations to 280, with more to come.
And analyzing changes in Wawa’s visit share in one of Florida’s biggest markets – the Miami-Ft. Lauderdale DMA – shows how successful the chain’s local expansion has been. Between January 2019 and April 2024, Wawa more than doubled its category-wide visit share in the Miami area (i.e. the portion of total c-store visits in the DMA going to Wawa) – from 19.0% to nearly 40.0%.
A look at changes in Wawa’s Miami-Ft. Lauderdale trade area shows that the chain’s growing visit share has been driven by an expanding market and an increasingly diverse audience.
In April 2019, there were some 55 zip code tabulation areas (ZCTAs) in the Miami-Ft. Lauderdale DMA from which Wawa drew at least 3,000 visits per month. By April 2021, this figure grew to 96 – and by April 2024, it reached 129.
Over the same period, the share of “Family Union” households in Wawa’s local captured market – defined by the Experian: Mosaic dataset as families comprised of middle-income, blue collar workers – nearly doubled, growing from 7.4% in April 2019 to 14.4% in April 2024.
Retail media networks that make it easier to introduce shoppers to products and brands that are closely aligned with their preferences and habits offer a win-win-win for retailers, advertisers, and consumers alike. And Costco and Wawa are extremely well-positioned to make the most of this opportunity.
Everybody loves coffee. And with some 75% of American adults indulging in a cup of joe at least once a week, it’s no wonder the industry is constantly on an upswing.
In early 2024, year-over-year (YoY) visits to coffee chains increased nationwide – with every state in the continental U.S. experiencing year-over-year (YoY) coffee visit growth.
The most substantial foot traffic boosts were seen in smaller markets like Oklahoma (19.4%), Wyoming (19.3%), and Arkansas (16.9%), where expansions may have a more substantial impact on statewide industry growth. But the nation’s largest coffee markets, including Texas (10.9%), California (4.2%), Florida (4.2%), and New York (3.5%), also experienced significant YoY upticks.
The nation’s coffee visit growth is being fueled, in large part, by chain expansions: Major coffee players are leaning into growing demand by steadily increasing their footprints. And a look at per-location foot traffic trends shows that by and large, they are doing so without significantly diluting visitation to existing stores.
On an industry-wide level, visits to coffee chains increased 5.1% YoY during the first five months of 2024. And over the same period, the average number of visits to each individual coffee location declined just slightly by 0.6% – meaning that individual stores drew just about the same amount of foot traffic as they did in 2023.
Drilling down into chain-level data shows some variation between brands. Dutch Bros., BIGGBY COFFEE and Dunkin’ all saw significant chain-wide visit boosts, accompanied by minor increases in their average number of visits per location.
Starbucks, for its part, which reported a YoY decline in U.S. sales for Q2 2024, maintained a small lag in visits per location. But given the coffee leader’s massive footprint – some 16,600 stores nationwide – its ability to expand while avoiding more significant dilution of individual store performance shows that Starbucks’ growth is meeting robust demand.
What is driving the coffee industry’s remarkable category-wide growth? And who are the customers behind it? This white paper dives into the data to explore key factors driving foot traffic to leading coffee chains in early 2024. The report explores the demographic and psychographic characteristics of visitors to major players in the coffee space and examines strategies brands can use to make the most of the opportunity presented by a thriving industry.
One factor shaping the surge in coffee visit growth is the slow-but-sure return-to-office (RTO). Hybrid work may be the post-COVID new normal – but RTO mandates and WFH fatigue have led to steady increases in office foot traffic over the past year. And in some major hubs – including New York and Miami – office visits are back to more than 80.0% of what they were pre-pandemic.
A look at shifting Starbucks visitation patterns shows that customer journeys and behavior increasingly reflect those of office-goers. In April and May 2022, for example, 18.6% of Starbucks visitors proceeded to their workplace immediately following their coffee stop – but by 2024, this share shot up to 21.0%.
Over the same period, the percentage of early morning (7:00 to 10:00 AM) Starbucks visits lasting less than 10 minutes also increased significantly – from 64.3% in 2022 to 68.7% in 2024. More customers are picking up their coffee on the go – many of them on the way to work – rather than settling down to enjoy it on-site.
Dunkin’ is another chain that is benefiting from consumers on the go. Examining the coffee giant’s performance across major regional markets – those where the chain maintains a significant presence – reveals a strong correlation between the share of Dunkin’ visits in each state lasting less than five minutes and the chain’s local YoY trajectory.
In Wisconsin, for example, 50.9% of visits to Dunkin’ between January and May 2024 lasted less than five minutes. And Wisconsin also saw the most impressive YoY visit growth (5.9%). Illinois, Ohio, Maine, and Connecticut followed similar patterns, with high shares of very short visits and strong YoY showings.
On the other end of the spectrum lay Tennessee, Alabama, and Florida, where very short visits accounted for a low share of the chain’s statewide total – under 40.% – and where visits declined YoY.
Dunkin’s success with very short visits may be driven in part by its popular app, which makes it easy for harried customers to place their order online and save time in-store. And this is good news indeed for the coffee leader – since customers using the app also tend to generate bigger tickets.
Dutch Bros.’ meteoric rise has been fueled, in part, by its appeal to younger audiences. Recently ranked as Gen Z’s favorite quick-service restaurant, the rapidly-expanding coffee chain sets itself apart with a strong brand identity built on cultivating a positive, friendly customer experience.
And Dutch Bros.’ people-centered approach is resonating especially well with singles – including young adults living alone – who may particularly appreciate the chain’s community atmosphere.
Analyzing the relative performance of Dutch Bros.’ locations across metro areas – focusing on regions where the chain has a strong local presence – shows that it performs best in areas with plenty of singles. Indeed, the share of one-person households in Dutch Bros.’ local captured markets is very strongly correlated with the coffee brand’s CBSA-level YoY per-location visit performance. Areas with higher concentrations of one-person households saw significantly more YoY visit growth in the first part of 2024. (A chain’s captured market is obtained by weighting each Census Block Group (CBG) in its trade area according to the CBG’s share of visits to the chain – and so reflects the population that actually visits the chain in practice).
The share of one-person households in Dutch Bros.’ Tucson, AZ captured market, for example, stands at 33.4% – well above the nationwide baseline of 27.5%. And between January and May 2024, Tucson-area Dutch Bros. saw a 6.0% increase in the average number of visits per location. Tulsa, OK, Medford, OR, and Oklahoma City, OK – which also feature high shares of one-person households (over 30.0%) – similarly saw per-location visit increases ranging from 3.6% - 7.0%. On the flip side, Fresno, CA, Las Vegas-Henderson-Paradise, NV, and San Antonio-New Braunfels, TX, which feature lower-than-average shares of single-person households, saw YoY per-location visit declines ranging from 1.5%-9.5%.
As Dutch Bros. forges ahead with its planned expansions, it may benefit from doubling down on this trends and focusing its development efforts on markets with higher-than-average shares of one-person households – such as university towns or urban areas with lots of young professionals.
Michigan-based BIGGBY COFFEE is another java winner in expansion mode. With a growth strategy focused on emerging markets with less brand saturation, BIGGBY has been setting its sights on small towns and rural areas throughout the Midwest and South. Though the chain does have locations in bigger cities like Detroit and Cincinnati, some of its most significant markets are in smaller population centers.
And a look at the captured markets of BIGGBY’s 20 top-performing locations in early 2024 shows that they are significantly over-indexed for suburban consumers – both compared to BIGGBY as a whole and compared to nationwide baselines. (Top-performing locations are defined as those that experienced the greatest YoY visit growth between January and May 2024).
“Suburban Boomers”, for example – a Spatial.ai: PersonaLive segment encompassing middle-class empty-nesters living in suburbs – comprised 10.6% of BIGGBY’s top captured markets in early 2024, compared to just 6.6% for BIGGBY’s overall. (The nationwide baseline for Suburban Boomers is even lower – 4.4%.) And Upper Diverse Suburban Families – a segment made up of upper-middle-class suburbanites – accounted for 9.6% of the captured markets of BIGGBY’s 20 top locations, compared to just 7.2% for BIGGBY’s as a whole, and 8.3% nationwide.
Coffee has long been one of America’s favorite beverages. And java chains that offer consumers an enjoyable, affordable way to splurge are expanding both their footprints and their audiences. By leaning into shifting work routines and catering to customers’ varying habits and preferences, major coffee players like Starbucks, Dunkin’, Dutch Bros., and BIGGBY COFFEE are continuing to thrive.
