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In recent weeks, we’ve analyzed auto dealers and convenience stores, so we thought we’d extend the conversation by taking a look at the car wash industry. The car wash industry in the United States has been one of the fastest growing retail categories coming out of the pandemic due to the increasing number of vehicles on the road, an increase in average vehicle age, a shift to a membership-based model for many operators, as well as advancements in car wash technology that have made services more efficient and automated. This shift is evidenced by the fact that around 80% of car washes are now done at professional locations, compared to 48% in 1994 according to the International Car Wash Association.
According to car wash trade groups, there are approximately 65,000 car wash locations across the nation. Mister Car Wash is the largest car wash chain in the U.S., operates more than 480 locations across 21 states. However, the category remains highly fragmented, with nearly three-fourths of industry operators having less than 2 locations. This has naturally set the stage for industry consolidation the past several years, with larger companies acquiring smaller operators to expand their footprints. We see the overall growth and consolidation of the category in a visitation trendline of a custom grouping of nearly 60 of the largest car wash chains in the U.S., where total visits have increased by roughly seven times since 2017.
We also see consolidation show up share of visit numbers from 2019-2023, which we show below. Mister Car Wash has remained the largest player in the category with respect to share of visits the past several years by growing both its unit counts (from 322 at the end of 2019 to 482 as of March) and visits per location (up more than 8% over the same time period). There has been movement among the chains ranked number 2 through 6 the past several years, but the group has generally included Quick Quack Car Wash, Take 5 Car Wash, Tommy’s Express Car Wash, and Zips Car Wash. However, the most notable observation from share of visit trends is the tremendous growth in visit share among smaller chains the past several years.
Car washes have been an attractive investment for private equity the past several years, helping to fuel some of the growth of smaller chains. Individual car wash locations generate an estimated $1.5M in annual sales according to industry trade groups–which is slightly ahead of the average unit sales of a quick-service restaurant chain of $1.4 million–while offering lower labor requirements and more predictable results due to the increasing popularity of membership models. In many respects, the growth of the car wash category mirrors the growth we’ve seen across the fitness category the past several years.
Despite the strong industry growth the past several years, Q1 2024 trends were impacted by a number of factors according to Mister Car Wash’s management team, including increased competition and a lower-income customer cohort that's been under more pressure (inclement weather in January across much of the country also likely played a role). Placer data confirms that Q1 2024 was in fact the weakest quarter from a category visit per location standpoint in several years. However, we’ve seen a rebound in Q2 2024 trends so far, with quarter-to-date visitation trends pacing just behind the year ago period with just a few days left in the quarter.
We mentioned that a membership-based approach has helped to drive visitation growth for the category and led to more predictable results, and we see that when we look at visitor loyalty data for Mister Car Wash. According to the company’s most recent annual report, it increased overall Unlimited Car Wash (UWC) monthly subscription penetration to 71% of total wash sales in 2023, up from 68% the year prior. When we look at visits from “casual” (1 visit per month) versus “loyal” (2+ visits per month) customers, we’ve seen a meaningful shift toward more loyal customers the past several years, particularly during peak visitation months in the summer.
Despite a slower start to 2024 due to aforementioned factors, the U.S. car wash industry appears well positioned for continued growth and consolidation due to the continued aging of the auto fleet, population migration trends, the continued shift toward membership-based revenue models, attractive unit economics, and new technological advances.
In June 2024, Placer.ai released three white papers: Unlocking Potential in Underserved Grocery Markets, Brewing Success: Winning Strategies for Coffee Chains, and Advantages of New Players in the Retail Media Space.
Below is a taste of our findings from Brewing Success: Winning Strategies for Coffee Chains – which dove into the data to see how leading coffee chains including Starbucks, Dunkin’, Dutch Bros., and BIGGBY COFFEE are driving coffee visits in 2024.
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.
Read the full report here to discover more coffee insights. For more data-driven consumer research, visit our resource library.
Barnes & Noble has undergone a transformation in recent years – with new leadership and a strategic shift towards smaller, more localized book stores.
But how have these changes impacted the chain’s performance? We dove into the data to find out.
Since November 2023, Barnes & Noble has experienced consistent YoY visit growth. Only in January did foot traffic dip into the red – likely a result of the unusual cold snap that weighed on retailers nationwide.
Like many booksellers, Barnes & Noble does a significant share of its yearly business during the holiday shopping season, when people flock to bookstores to buy gifts for loved ones. So the chain’s impressive YoY performance in November and December 2023 offers an especially promising sign of its positioning going forward.
Barnes & Noble boasts more than 600 stores across the country, and after several years during which it shuttered locations, the chain has begun to expand once again. The company recently acquired Tattered Cover – a Denver-based independent bookseller, which Barnes & Noble will continue to operate under its existing name. And the Chicago area is getting five new Barnes & Noble locations this year.
Examining the visitation patterns and characteristics of Barnes & Noble’s existing visitor base in these CBSAs highlights the bookseller’s growth potential in these regions. In both CBSAs, the chain experienced positive YoY foot traffic growth in early 2024. Barnes & Noble locations in both CBSAs also drew customers from areas with higher median household incomes (HHIs) and greater shares of families with children than the chain’s nationwide baseline – two groups that may be particularly likely to frequent bookstores.
One key factor that has powered Barnes & Noble’s growth trajectory is its emphasis on curating local, independent bookstore feel in its stores. This approach allows individual store managers autonomy in decision-making, and emphasizes stocking local authors and hosting community events.
And diving into the psychographic characteristics of Barnes & Noble’s visitor base in these two expansion markets reveals that, while visitors share some similarities across different geographical regions, they also have unique characteristics.
For example, the Experian: Mosaic dataset identified higher shares of “Singles and Starters” and “Promising Families” in the trade areas that feed visitors to Denver-Aurora-Lakewood Barnes & Noble locations. Meanwhile, stores in the Chicago-Naperville-Elgin tended to attract visitors coming from trade areas with higher shares of “Power Elite” residents.
Local stores can harness these insights to effectively curate a retail experience that resonates with their customer bases: Denver-area Barnes & Noble locations can actively court young families with children or singles who are starting out in their careers. On the flip side, Chicago-area stores can curate offerings to resonate with their more affluent customer base.
Barnes & Noble is demonstrating how to maintain relevance in a world dominated by Amazon. By creating an experience that satisfies book lovers' craving for an independent bookstore atmosphere, the company is thriving.
Will Barnes & Noble sustain strong visitor numbers while maintaining its local charm?
Visit Placer.ai to keep up with the latest data-driven retail insights.
Small-format stores which offer consumers more convenient and localized shopping experiences are on the rise. The trend has been gaining traction since COVID – spearheaded by major retailers like Macy's and Nordstrom, and followed by players such as IKEA, Target, Best Buy, and others.
But what impact do small-format stores have on shopper behavior? We dove into the data to explore consumer interaction with three retailers that are leaning into the small-format space: Sprouts Farmers Market, Bloomingdale’s, and BJ’s Wholesale Club.
Sprouts Farmers Market provides a great example of how a small-format expansion strategy can drive visit growth. Since January 2022, the chain has doubled down on a small-format strategy aimed at significantly reducing the chain’s square footage and environmental impact. And partially thanks to this expansion effort, Sprout saw visits to its smaller format stores increase by nearly 50.0% over the same period – helping the brand outpace the overall grocery sector in early 2024.
By focusing on customer acquisition through smaller accessible stores, Sprouts is successfully meeting the demand for convenience and sustainability. And as a pioneer in the small-format grocery space, Sprouts is setting a high bar for other grocery chains like Whole Foods and Trader Joe’s, who are rolling out their own smaller convenience-style locations. Could this mark the start of an overall shift in the grocery sector? Only time will tell.
In February 2024, Macy’s announced a turnaround plan calling for the closing of about 30% of its traditional department stores, the opening of smaller versions of the company’s eponymous chain, and the addition of more Bloomingdale’s locations. Macy’s also plans the addition of at least one more small-format Bloomie’s store this year – the highly curated, small-format neighborhood concept launched by Macy’s in 2021. With three locations nationwide – and a fourth set to open this fall in New Jersey – Bloomie’s features a mix of established brands and trendy pop-ups tailored to local tastes.
And zooming in on visitation data for the Bloomie’s in Skokie, Illinois shows how the format helps Bloomingdale’s attract new audience segments. Compared to Bloomingdale’s full-size locations, visitors to the Skokie Bloomie’s in May 2024 came from areas with higher shares of urbanites – including STI: Landscape’s “Urban Cliff Dwellers”, “Seasoned Urban Dwellers”, and “Urban Cliff Climbers” segments. This indicates that Bloomie’s appeals to city dwellers – aligning with Bloomingdale’s goal of providing a contemporary, accessible, and convenient shopping experience in urban settings.
In April 2022, BJ’s Wholesale Club unveiled BJ’s Market - a smaller-format store in Warwick, Rhode Island that’s roughly half the size of a full-sized club location. Examining the location’s visit performance over the last two years highlights the significant impact small-format stores can have on customer engagement and loyalty.
During the first five months of 2024, BJ’s small-format Warwick location experienced consistent YoY visit growth – outperforming the chain’s already-impressive state- and nationwide averages over nearly the entire analyzed period.
But visitors also interacted with the small-format venue differently in other important ways as well. Unsurprisingly, the average visit stay at the small format BJ’s in May 2024 was significantly shorter than the average stay at BJ’s in Rhode Island and at the chain nationwide (21 minutes, versus 27.6 and 30.7 minutes, respectively). And people tended to drop by the Warwick BJ’s more frequently – with 55.0% of visitors visiting the location at least twice during the month, compared to just 37.5% in Rhode Island and 38.7% nationwide.
BJ’s testing of the Warwick small-format location proves that wholesale can be extended beyond endless roaming through enormous big box stores in search for the best value bargain. There is a clear demand for a quicker, more frequent and more efficient shopping experience in the wholesale space, and BJ’s is seizing the opportunity.
Retailers across categories are increasingly incorporating small format stores into their evolving store footprints – with promising results. How will this trend continue to play out? And will consumer preferences continue to shift towards quick, efficient, experiential, and curated shopping experiences?
Follow Placer.ai to keep up with the latest data-driven retail trends.
June 16th, 2024 was Father’s Day – and sons and daughters nationwide took the opportunity to show their dad some appreciation. But how did Father’s Day retail and dining foot traffic compare to that of Mother’s Day?
We dove into the data to find out.
Last month, we observed that though Mother’s Day wasn’t actually created by the greeting card industry, the holiday is one of Hallmark’s busiest days of the year.
And foot traffic analytics show that Father’s Day isn’t far behind. On June 15th, 2024 (the Saturday before Father’s Day), Hallmark stores drew 54.9% more visits than on an average year-to-date (YTD) Saturday – making it the company’s third-busiest day of the year so far. Only May 10th and May 11th, the days before Mother’s Day, drew bigger crowds to the greeting card chain.
And a look at visits to major industries that are top picks for dads shows that a variety of segments enjoyed visit boosts in the run-up to Father’s Day – though for most categories, the magnitude of the bump was considerably smaller than that seen before Mother’s Day.
But for one category in particular – recreational and sporting goods – it was the day before Father’s Day that was the bigger deal. On June 15th, 2024, visits to these retailers jumped 30.9% compared to an average YTD Sunday – making them the biggest beneficiaries of dad’s special occasion. Hobbies, crafts, & gift stores, on the other hand – which saw a substantial visit boost in the lead-up to Mother’s Day – experienced a drop in foot traffic.
Like on Mother’s Day, grateful offspring ponied up on Father’s Day to treat their dads to a nice, sit-down meal. On June 16th, 2024, visits to full-service dining venues jumped 30.3% compared to a YTD Sunday average. Meanwhile, visits to quick-service restaurants increased just slightly, and those to fast-casual establishments declined.
Still, throughout most of the country, full-service restaurants (FSRs) were much busier this year on Mother’s Day than on Father’s Day. The discrepancy was most pronounced in Northeastern states like Connecticut, Pennsylvania, New York, New Hampshire, Massachusetts, Maine, and New Jersey – where Mother’s Day FSR visits were more than 20.0% higher than Father’s Day ones. But two states in the Pacific Northwest, Washington and Oregon, drew more FSR foot traffic on Father’s Day than on Mother’s Day – perhaps due in part to the region’s special connection to the occasion honoring dads. (The tradition of celebrating Father’s Day originated in Spokane, WA in the early 1900’s, decades before it was declared a federal holiday in 1972).
The dining difference between Father’s Day and Mother’s Day is about more than just quantity: Where moms have a clear soft spot for Olive Garden, dads are all about the steak. Texas Roadhouse was the single busiest FSR chain on Father’s Day this year, with visits outpacing an average YTD Sunday by 49.4%.
Father’s Day doesn’t have quite the same retail and dining impact as Mother’s Day – but it’s an important milestone nonetheless.
What other special calendar days are poised to draw outsize customer foot traffic in 2024?
Follow Placer.ai’s data-driven retail and dining analyses to find out.
We’ve previously written about the influence of East Asian, Southeast Asian, and Hispanic cultures and their influence on groceries, malls, and food halls with the likes of H Mart, 99 Ranch, Asia Garden Mall, and Mercado Gonazlez. Now, let’s turn our attention to the huge Indian subcontinent, which includes India, Pakistan, Bangladesh, Nepal, Bhutan, Sri Lanka, and the Maldives.
One of this summer’s breakout sports stories is that of Sarubh Netravalkar, Oracle software engineer by day, Cricket star on the side! He helped Team USA beat Pakistan during the Men’s T20 Cricket World Cup in a huge upset, and has now been nicknamed the “Desi Diaspora Darling.” The United States is co-hosting and participating in this Cricket tournament for the first time, and fans came out in droves to Eisenhower Stadium in Nassau, NY, which essentially became a pop-up stadium in order for the competition to take place. Tikka fries, an ultimate combo of South Asian flavor and American snack favorite, were on offer at the concession stands.
The embrace of South Asian flavors can also be seen in the growth and success at grocery. Patel Brothers and India Bazaar are two Indian grocery chains that have been growing rapidly. The former saw increased year-over-year growth in 8 of the 12 months preceding. Meanwhile, the latter saw year-over-year growth in 11 out of the last 12 months.
The grocery stores can be found in various states in the US, with a particular concentration for Patel Bros in the Chicago, New York, Boston, and DC areas and for India Bazaar in the Dallas area.
South Asian food has many highly flavorful vegetarian and vegan options, which makes it attractive to those seeking a taste boost to dishes. Chai is a staple at many tea and coffee specialty stores, and some are saying that naan sandwiches could be the next burrito. Having the right recipe can really open doors. Bombay Frankie, now located within Westfield Culver City, has its origins at a gas station, but the demand became so high that they opened up a brick-and-mortar restaurant. Their affectionately called “Indian Burrito” comes both rolled up or deconstructed. With deconstructed, one can decide the perfect bite ratio of fluffy naan, seasoned chicken, cool raita, crunchy cucumbers, and tomatoes bursting with flavor.
A quick Google search shows a burst of restaurants that incorporate naan into their name, such as Naan-tastic, Naansense, and Naan & Kabob. Naan n Curry is an example of a naan chain that has seen positive year-over-year growth.
Malls have long acted as a gleaming symbol of American retail. Following the opening of the first indoor mall in 1956, and as the American middle class increasingly moved from the city to the suburbs, malls continued to open at a rapid rate. By 1960, some 4,500 shopping centers had opened nationwide, filling the growing demand for “third places” – spaces that allowed the newly suburban populations to gather, socialize, and create community. And while that role evolved over the years, it’s safe to say that malls have played a major part in shaping the American shopping culture.
But malls’ rapid expansion led to an oversaturated market – some estimates suggest that there are approximately 24 square feet of retail space per U.S. citizen, as compared to 4.6 for the U.K. and 2.8 for China. Many began to predict the demise and downfall of malls, and that narrative intensified as online shopping grew in popularity. The rise of big-box stores, a focus on “services, not things,” and COVID-19 only accelerated these trends.
A lot of the doom and gloom predictions tend to de-emphasize the mall's role as a modern incarnation of a bustling downtown shopping area.
But a lot of these doom and gloom predictions focus on malls only as a place to shop, and tend to de-emphasize their other role as the third place – a modern incarnation of a bustling downtown shopping area, replete with shops, services, and places to meet. And after two years of isolation and a new, pandemic-induced wave of suburban relocation, malls’ potential to bring people together is more prized than ever.
So although malls were hit hard during COVID-19, many of them are finding ways to reinvent themselves and stay relevant. Today, more than halfway through 2022, the challenges that malls face continue to evolve and change – but malls are evolving too. This white paper covers a few specific ways that some malls have found to thrive in the new normal. Some shopping centers are turning to entertainment to draw crowds into their doors. Others are focusing on offering a full visitor experience that extends beyond simply grabbing a new shirt or a burger at the food court. Still, more are embracing omnichannel options, offering an integrated on and offline experience to their shoppers. In the face of significant retail challenges, top-tier malls are turning to innovative solutions to stay ahead of the game.
The pandemic posed significant challenges to malls. Although foot traffic to the category rose back up in the summer of 2021, the Delta and subsequent Omicron waves brought visits down once more. And as visit gaps post-Omicron began to narrow, inflation and gas prices put the brakes on any return to normalcy. April and May 2022 saw visits beginning to trend up, though the unrelenting rise of inflation, the highest it’s been in the past 40 years, has slowed that recovery slightly.
Foot traffic data shows that malls are continuing to attract visitors, despite the challenges that seem to crop up weekly.
Still, foot traffic data shows that malls are continuing to attract visitors, despite the challenges that seem to crop up weekly. And while they may no longer play the central role they once did in Americans’ shopping routines, malls still serve as indoor community hubs where friends and family can come together for diverse food, shops, and entertainment options. This could explain why top-tier malls keep on coming back despite the seemingly constant obstacles.
Comparing monthly visits from January 2022 through July 2022 to the same period in 2019 highlights the significant difficulties facing the sector. Indoor malls, open-air lifestyle centers, and outlet malls alike saw marked lags in foot traffic as compared to three years ago.
Monthly year-over-three-year (Yo3Y) foot traffic comparisons also highlight mall resilience.
The monthly year-over-three-year (Yo3Y) foot traffic comparisons also highlight mall resilience. Following an Omicron-plagued January, the visit gaps narrowed in February 2022 to less than 5% for all the segments. And although the increase in gas prices and inflation brought visits down in March, malls quickly bounced back in April 2022, with indoor malls seeing only 1.8% fewer visits than in 2019 and open-air shopping centers down only 4.8% Yo3Y. Foot traffic fell again in May and June as consumers tightened their budgets in the face of rising prices, but consumers appear to have quickly made peace with the new economic reality. By July 2022, visits to indoor malls and open-air lifestyle centers were only 3.5% and 2.7% lower than they had been in July 2019.
COVID didn’t just impact visit numbers – since 2020, mall visits have also gotten shorter, likely a result of pandemic restrictions and a general desire not to congregate any longer than necessary. And although 2021 and 2022 saw a slight uptick in time spent at malls and shopping centers – from 60 minutes in 2020 to 62 minutes in 2021 and 2022 – the median dwell time is still significantly lower than the 70 minutes median dwell time of pre-COVID 2018 and 2019.
Shorter visits are not necessarily a bad thing – intent-driven shoppers may simply be doing more research ahead of time and less in-mall browsing.
Shorter visits are not necessarily a bad thing in and of themselves – consumers today are highly informed, so many intent-driven shoppers may simply be doing more research ahead of time and less in-mall browsing. But shorter (and fewer) visits do mean that malls must focus on giving shoppers a reason to visit. We explore some successful strategies below.
Malls have long integrated entertainment into their overall experience in the form of arcades, movie theaters, and even coin-operated animal rides. Some malls, however, are taking their entertainment offerings to the next level.
In August 2021, CBL Properties, a Tennessee-based property developer, announced the opening of the Hollywood Casino by Penn National Gaming in the York Galleria Mall in York, Pennsylvania. The 80,000 square foot casino, which boasts 500 slots and 24 live-action table games, opened in the mall’s lower level. The space was occupied by a now-closed Sears department store, and the entertainment venue now functions as a new anchor to draw customers in.
The casino’s opening has had a dramatic impact on the mall’s foot traffic. In a year-over-three-year (Yo3Y) comparison, July 2021 saw 2.4% fewer visitors than July 2018. But when the casino opened in August 2021, visits to the location jumped to 31.4% Yo3Y. This increase is all the more impressive considering that the casino opened on August 19th, with only 12 days left in the month.
The mall, which had seen negative Yo3Y visit numbers until the casino’s opening, has sustained the positive visit trend through July 2022 – a testament to the appeal of in-mall entertainment.
Another mall betting on indoor entertainment is the Pierre Bossier Mall in Bossier City, Louisiana. In April 2022, Surge Entertainment opened a child-friendly space, which includes zip-lining, bowling, laser tag and arcade games. The Surge Entertainment chain is co-owned by Drew Brees, the former New Orleans Saints quarterback, and has 15 locations around the country. The Pierre Bossier Mall branch is filling the space vacated by Virginia College, which closed its doors in 2018.
Since Surge Entertainment opened its Bossier City location, the mall has seen a dramatic increase in average dwell time.
Since Surge Entertainment opened its Bossier City location, the mall has seen a dramatic increase in average dwell time. Between July 2021 and March 2022, median dwell time hovered between 51 and 58 minutes. But following the center’s opening, median dwell time jumped to 78 minutes. Since then, the median dwell time has remained consistently elevated: In the four months since the Surge Entertainment opening, median dwell times did not drop below 75 minutes.
Brick-and-mortar retailers once viewed online shopping as a threat – but now, mall owners and operators are increasingly turning to digital channels to complement existing approaches. COVID-19 and the surge of online shopping further fueled malls’ digital progress. Over the past two years, large malls and suburban shopping centers across the country have been rolling out various online and social shopping options and adopting omnichannel strategies.
In September 2020, Centennial, a real estate investment firm with many malls and mixed-use entertainment centers in its portfolio, launched a chain-wide omnichannel platform called Shop Now!. The app allows consumers to shop across all Centennial malls the way someone would shop on Amazon.
The first phase of the program, which launched in October 2020, allowed users to browse an AI-powered search engine connected to the inventory of all of the stores operating in their mall of interest. In February 2022, Centennial debuted phase two of the program at its Santa Ana, CA based MainPlace Mall. It allows customers to consolidate orders from several stores into a single cart, get the order fulfilled by personal shoppers, and have the orders ready for same-day delivery or on-site pickup.
The e-commerce app could have detracted shoppers from physically going to the mall – but instead, the program increased both monthly and loyal visitors.
The app allows consumers to browse and shop from the comfort of their phones. It could have detracted shoppers from physically going to the mall – but instead, the program has increased both monthly and loyal visitors. In the months following the launch of the second phase, MainPlace Mall saw its loyal visits increase by 5% (from 46.2% in February ‘22 to 51.3% in June ‘22), while overall monthly visits in April ‘22 increased by 5.5% when compared to 2019. The digital investment also helped the mall make sales that could have been lost to other e-commerce platforms. The mall’s brick-and-mortar success following the addition of a digital channel highlights how malls can rise to the top by embracing an omnichannel strategy.
Continuing its innovative streak, the MainPlace Mall recently added an experiential component with the opening the American Ninja Warrior Adventure Park in July 2022 in the place of four former retail stores. During its first month of operation, the park drove the mall’s share of loyal visits up by 13.4% compared to the previous month while boosting Yo3Y monthly visits by 18.0%.
The difference in impact between the online platform launch and the opening of the American Ninja Warrior Adventure Park indicates that malls can enjoy both gradual gains over time as well as jumps in foot traffic and loyalty, depending on the strategy they adopt.
Omnichannel strategies can also revitalize food courts hit hard by the pandemic. Arundel Mills Mall, part of the Simon Property Group, began offering online orders in February 2022 via a platform called Snackpass, allowing users to use the app at various eateries around the mall. Snackpass, launched in 2017 as a food ordering app on the Yale campus, facilitates group ordering and includes various social features. Its current iteration allows customers to pre-order food, skip lines, collect rewards, and engage with friends. It also offers discounts on group orders, in an effort to promote social dining.
Since the beginning of the Snackpass partnership, the shopping center itself is seeing more visitors – many of whom are coming from farther away.
Since the beginning of the Snackpass partnership, the shopping center itself is seeing more visitors – many of whom are coming from farther away. In the five months following the app’s launch, Arundel Mills saw an overall increase of 15 square miles to its True Trade Area (TTA), and an increase of 29.5% in visits per sq. ft. – The consistent increase in TTA and visits per sq. ft. are a testament to the power of innovative dining partnerships to draw traffic to top-tier malls.
With many retailers reducing their on-mall presence, empty brick-and-mortar stores have attracted plenty of negative attention. But now, malls are increasingly repurposing vacated spaces in new, innovative ways that resonate with local communities and can fill their evolving needs.
At the Ocean County Mall in Toms River, NJ, Simon Property Group repurposed the huge space left by a former Sears store and turned it into a lifestyle center, with stores opening throughout 2020. The space is now being used by a number of highly popular chains such as LA Fitness, Ulta Beauty, HomeSense, and P.F. Chang’s and also includes a children's play area.
This pivot seems to be working. Median dwell time to the mall has increased from 53 minutes to 56 minutes, a significant change when considering that a majority of malls have recently seen their dwell times drop.
The center has also seen the median age for its trade area decrease from 40.5 years old in the first half of 2021 to 37.2 in the first half of 2022, a dramatic shift in visitor demographics. Yo3Y visits are strong as well – July 2022 were up by 17.1%.
In a similar tale of a closed Sears turning into a lifestyle center, the Northshore Mall in Peabody, MA turned the space vacated by the department store into a mixed-use center. The most significant anchor is now the high-end Life Time Fitness Center that offers cardio, weights, and functional training rooms, and includes yoga, pilates, and cycling studios, indoor and outdoor pools, basketball and pickleball courts, saunas, and a bistro.
As soon as the health club opened its doors in July 2021, visits to the mall increased – significantly outpacing the levels seen when Sears was still open.
As soon as the health club opened its doors in July 2021, visits to the mall increased – significantly outpacing the levels seen when Sears was still open. Both Yo3Y and year-over-four-year (Yo4Y) foot traffic numbers were impressive, with July 2022 seeing 17.2% more visitors than three years prior.
As visits to malls become more focussed, selecting the right tenant has never been more important – and that may mean looking at unconventional occupants to draw in customers.
In one example of tapping into local needs, the Westfield Oakridge shopping center in San Jose, CA, opened a specialty grocery store on its premises. 99 Ranch Market, one of the largest Asian supermarket chains in the U.S., began operating its first mall location in March 2022. The location includes classic grocery store items such as produce, meat, and seafood sections, and also boasts a dining hall, tea bar, and bakery.
Its opening day saw lines snaking out the door, as excited locals queued to sample the store’s delicacies. And the crowd-drawing hype seems to be more than a flash in the pan – the months following the opening were the mall’s strongest in the past year and a half. Yo3Y visits were up by 10.1% in July 2022 , with some shoppers reporting that the addition of the grocery store had turned Westfield Oakridge into their all-in-one stop shop.
Although the area was not lacking in grocery options, retail foot traffic data indicates that the new 99 Ranch Market at Westfield Oakridge Mall still filled a void.
Although the area was not lacking in grocery options, retail foot traffic data indicates that the new 99 Ranch Market at Westfield Oakridge Mall still filled a void – the new grocery store’s trade area has only minimal overlaps with the other trade areas of the nearby 99 Ranch Markets locations. This means that most of the new 99 Ranch Market’s customers were not being well-served by the existing locations of the chain.
Westfield Oakridge is not the only San Jose mall turning to food to attract the crowds. On June 16th 2022, following much hype and a pandemic-related delay, Eataly, the all-in-one Italian market, restaurant, and cooking school opened its first Northern California location at the Westfield Valley Fair in Santa Clara, CA.
Prior to the launch, the Westfield Valley Fair mall was already one of the more successful malls in the country – but the opening of Eataly seems to be driving even more foot traffic. Yo3Y visits to malls during Eataly’s opening week exceeded 20% for the first time in months and have since remained consistently elevated, with visits for the week of July 25th up 27.7% relative to the equivalent week in 2019.
In March 2022, regional department store Von Maur opened its doors at The Village of Rochester Hills, an open-air lifestyle center in Michigan. The retailer, which has 36 locations throughout the Midwest, took over the space left vacant by Carson’s, another Midwest-based department store.
What may be the first new department store in the Detroit metropolitan area in over a decade is driving visits to the shopping center.
What may be the first new department store in the Detroit metropolitan area in over a decade is driving visits to the shopping center. Von Maur’s March 2022 opening pushed Yo3Y visits up by 16.9% compared to the mere 4.3% Yo3Y increase the month before.
Part of the secret to Von Maur’s success lies in the psychographic characteristics of residents within the mall’s trade area. Using Spatial.ai’s GeoWeb data, a tool which tracks online engagement with various trends and topics by neighborhood, we found that the TTA surrounding The Village had an index of 131 for department store shoppers. In other words, people in the mall’s trade area exhibited heightened interest in department stores – they engaged with department-store-related content at a rate that was 1.3 times higher than the national average – which helps explain why Von Maur is thriving in this specific location. And in another testament to the strength of immersive retail experiences, Von Maur, which focuses on curating a unique shopper journey and features a pianist at all of its locations, has been ranked the top department store in America.
The addition of Von Maur is not the only change that The Village is implementing – the mall has continued adding new stores and will be opening more throughout the year. These, too, will likely boost foot traffic to the lifestyle center.
The mall’s ability to select tenants that cater to, and reflect the needs and behaviors of its consumers is likely to continue driving success. By drilling down into the nitty-gritty details of who comes to shop, where they come from, and what shops they enjoy frequenting, mall management can tailor the shopping center to meet the needs of its base.
The “death of the American mall” has been predicted for years. The reality, however, is much more nuanced than that – like many other sectors, malls are undergoing a shift to help them better serve evolving customer needs and survive and thrive in an ever-shifting retail landscape.
The malls featured in this white paper have found ways to consistently attract visitors despite the various obstacles faced by the category over the past two years. By understanding that the American mall must evolve along with the consumers, mall owners can successfully revitalize their retail spaces.
This report leverages location intelligence data to analyze the auto dealership market in the United States. By looking at visit trends to branded showrooms, used car lots, and mixed inventory dealerships – and analyzing the types of visitors that visit each category – this white paper sheds light on the state of car dealership space in 2023.
Prior to the pandemic and throughout most of 2020, visits to both car brand and used-only dealerships followed relatively similar trends. But the two categories began to diverge in early 2021.
Visits to car brand dealerships briefly returned to pre-pandemic levels in mid-2021, but traffic fell consistently in the second half of the year as supply-chain issues drove consistent price increases. So despite the brief mid-year bump, 2021 ended with overall new car sales – as well as overall foot traffic to car brand dealerships – below 2019 levels. Visits continued falling in 2022 as low inventory and high prices hampered growth.
Meanwhile, although the price for used cars rose even more (the average price for a new and used car was up 12.1% and 27.1% YoY, respectively, in September 2021), used cars still remained, on average, more affordable than new ones. So with rising demand for alternatives to public transportation – and with new cars now beyond the reach of many consumers – the used car market took off and visits to used car dealerships skyrocketed for much of 2021 and into 2022. But in the second half of last year, as gas prices remained elevated – tacking an additional cost onto operating a vehicle – visits to used car dealerships began falling dramatically.
Now, the price of both used and new cars has finally begun falling slightly. Foot traffic data indicates that the price drops appear to be impacting the two markets differently. So far this year, sales and visits to dealerships of pre-owned vehicles have slowed, while new car sales grew – perhaps due to the more significant pent-up demand in the new car market. The ongoing inflation, which has had a stronger impact on lower-income households, may also be somewhat inhibiting used-car dealership visit growth. At the same time, foot traffic to used car dealerships did remain close to or slightly above 2019 levels for most of 2023, while visits to branded dealerships were significantly lower year-over-four-years.
The situation remains dynamic – with some reports of prices creeping back up – so the auto dealership landscape may well continue to shift going into 2024.
With car prices soaring, the demand for pre-owned vehicles has grown substantially. Analyzing the trade area composition of leading dealerships that sell used cars reveals the wide spectrum of consumers in this market.
Dealerships carrying a mixed inventory of both new and used vehicles seem to attract relatively high-income consumers. Using the STI: Popstats 2022 data set to analyze the trade areas of Penske Automotive, AutoNation, and Lithia Auto Stores – which all sell used and new cars – reveals that the HHI in the three dealerships’ trade areas is higher than the nationwide median. Differences did emerge within the trade areas of the mixed inventory car dealerships, but the range was relatively narrow – between $77.5K to $84.5K trade area median HHI.
Meanwhile, the dealerships selling exclusively used cars – DriveTime, Carvana, and CarMax – exhibited a much wider range of trade area median HHIs. CarMax, the largest used-only car dealership in the United States, had a yearly median HHI of $75.9K in its trade area – just slightly below the median HHI for mixed inventory dealerships Lithia Auto Stores and AutoNation and above the nationwide median of $69.5K. Carvana, a used car dealership that operates according to a Buy Online, Pick Up in Store (BOPIS) model, served an audience with a median HHI of $69.1K – more or less in-line with the nationwide median. And DriveTime’s trade areas have a median HHI of $57.6K – significantly below the nationwide median.
The variance in HHI among the audiences of the different used-only car dealerships may reflect the wide variety of offerings within the used-car market – from virtually new luxury vehicles to basic sedans with 150k+ miles on the odometer.
Visits to car brands nationwide between January and September 2023 dipped 0.9% YoY, although several outliers reveal the potential for success in the space even during times of economic headwinds.
Visits to Tesla’s dealerships have skyrocketed recently, perhaps thanks to the company’s frequent price cuts over the past year – between September 2022 and 2023, the average price for a new Tesla fell by 24.7%. And with the company’s network of Superchargers gearing up to serve non-Tesla Electric Vehicles (EVs), Tesla is finding room for growth beyond its already successful core EV manufacturing business and positioning itself for a strong 2024.
Japan-based Mazda used the pandemic as an opportunity to strengthen its standing among U.S. consumers, and the company is now reaping the fruits of its labor as visits rise YoY. Porsche, the winner of U.S New & World Report Best Luxury Car Brand for 2023, also outperformed the wider car dealership sector. Kia – owned in part by Hyundai – and Hyundai both saw their foot traffic increase YoY as well, thanks in part to the popularity of their SUV models.
Analyzing dealerships on a national level can help car manufacturers make macro-level decisions on marketing, product design, and brick-and-mortar fleet configurations. But diving deeper into the unique characteristics of each dealership’s trade area on a state level reveals differences that can serve brands looking to optimize their offerings for their local audience.
For example, analyzing the share of households with children in the trade areas of four car brand dealership chains in four different states reveals significant variation across the regional markets.
Nationwide, Tesla served a larger share of households with children than Kia, Ford, or Land Rover. But focusing on California shows that in the Golden State, Kia’s trade area population included the largest share of this segment than the other three brands, while Land Rover led this segment in Illinois. Meanwhile, Ford served the smallest share of households with children on a nationwide basis – but although the trend held in Illinois and Pennsylvania, California Ford dealerships served more households with children than either Tesla or Land Rover.
Leveraging location intelligence to analyze car dealerships adds a layer of consumer insights to industry provided sales numbers. Visit patterns and audience demographics reveal how foot traffic to used-car lots, mixed inventory dealerships, and manufacturers’ showrooms change over time and who visits these businesses on a national or regional level. These insights allow auto industry stakeholders to assess current demand, predict future trends, and keep a finger on the pulse of car-purchasing habits in the United States.
