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Limited-service restaurants faced a challenging landscape in 2025, with many price-sensitive consumers pulling back on dining out in favor of grocery prepared meals and brown-bag lunches. Traffic was harder to come by, and everyday demand softened across much of the category.
Even so, chains found creative ways to stand out. We dug into the data behind the busiest weeks of the year for quick-service and fast-casual restaurants to understand what actually moved traffic – and which strategies are most likely to help brands compete in what’s shaping up to be another value-conscious year.
Everyday value became table stakes across limited service in 2025, with $5 meals, bundles, and loyalty pricing no longer serving as clear differentiators. Yet unsurprisingly, freebies and truly memorable discounts still drew crowds.
The chains featured in the chart below all saw their highest weekly traffic peaks during promotions that felt distinctive, easy to understand, and clearly worth acting on. Some – like Dairy Queen’s Free Cone Day and Dave’s Hot Chicken’s Free Slider Day – involved no-purchase-necessary giveaways. Others relied on steep, attention-grabbing discounts, such as Whataburger’s Anniversary 75-cent burger and Pizza Hut’s $2 Tuesday promo, or culturally timed activations like Chipotle’s Stanley Cup–inspired hockey jersey BOGO.
For 2026, the takeaway is clear: Discounting still works, but the offers likely to truly motivate consumers are the ones that stand out from the everyday value they already expect.
Fortunately for restaurants, however, deep discounts and giveaways aren’t the only way to draw crowds - if they were, the economics wouldn’t be sustainable for long. In 2025, culture-driven moments came surprisingly close to matching the power of freebies, without the same margin trade-offs.
Take Krispy Kreme, for example. The chain’s annual National Donut Day promotion – including a no-purchase-necessary free donut and a $2 dozen with the purchase of 12 more – produced the chain’s largest single-day visit spike of the year (+219.7% versus an average day on June 6th, 2025) and helped push weekly visits to a yearly high.
But Krispy Kreme’s Back to Hogwarts collection which launched on August 18, 2025, generated a more sustained lift that nearly matched National Donut Day’s impact at the weekly level. While the campaign did include a free donut giveaway on Saturday, August 23rd for fans representing their favorite house, the data shows the surge wasn’t driven by the freebie alone: Traffic jumped 40.7% above an average Monday on launch day, compared with a 30.9% lift over an average Saturday on the day of the giveaway.
At McDonald’s and Burger King, too, pop-culture tie-ins dominated the promotional calendar. For both chains, the week of December 1st emerged as the busiest week of 2025, and also delivered the largest YoY weekly visit increase.
At Burger King, the lift came from the chain’s SpongeBob Movie Menu – starring the Krabby Whopper – launched on December 1st ahead of the film’s December 19th release. The promotion drove an 18.4% YoY traffic increase, with traffic – largely flat or down since September – remaining elevated in the weeks that followed.
At McDonald’s, momentum was fueled by a holiday-themed Grinched Menu, which arrived on the heels of the fast food leader’s highly successful Boo Bucket merchandise drop in October. The Boo Buckets drove McDonald’s second- and third-largest year-over-year visit spikes during the weeks of October 20 and 27, and the Grinch Meal built on that lift, pushing visits higher yet during the week of December 1st and sustaining momentum through the rest of the month.
The lesson here is twofold: Well-timed promotions tied to widely recognized cultural moments can still drive outsized traffic on their own, as Krispy Kreme and Burger King’s activations showed. But McDonald’s performance also underscores the value of sequencing – using one successful launch to carry momentum into the next.
Speaking of timing and sequencing, Starbucks’ viral Bearista offering, launched strategically just before the Brand’s iconic Red Cup Day, shows how well-timed promotions can compound impact.
Red Cup Day during the week of November 10th was Starbucks’ busiest day of 2025. But the week of Bearista (November 3rd) came awfully close – and delivered the brand’s largest YoY weekly visit increase of 2025. Just as importantly, the Bearista launch helped build visit momentum, setting the stage for what ultimately became Starbucks’ biggest Red Cup Day ever.
Consumers lining up to pay $30 for the Bearista also challenged another long-held assumption about QSR traffic in 2025: that offerings have to be cheap to deliver results. What makes this especially notable is that Bearista wasn’t tied to a movie release or external cultural IP. It was brand-first, premium-priced merchandise that still drove traffic at scale. And while not easily replicated, Starbucks’ Bearista success shows that scarcity, storytelling, and timing can unlock value beyond low-price promotions.
If you’ve gotten this far, you might be wondering: What about food? Don’t people still go to restaurants to eat – and aren’t craveable menu items supposed to drive traffic?
The answer is yes. Amid all the noise around discounts, collaborations, and merchandise, food still mattered in 2025. At Popeyes, the June 2nd launch of Chicken Wraps, priced accessibly at $3.99, drove the chain’s busiest week of the year. While wraps weren’t totally new to Popeyes’ menu, this rollout was framed as a value-forward, easy-to-understand innovation at a moment when affordability mattered – and consumers responded.
At Taco Bell and KFC, food-driven traffic spikes leaned more heavily on nostalgia. Taco Bell’s limited-time revival of Cheesy Street Chalupas and Quesaritos lifted visits roughly 8% above average, while KFC saw an even larger jump (11.4%) with the return of Potato Wedges and Hot & Spicy Wings. These weren’t experimental launches, but deliberate re-releases of proven favorites, giving diners something familiar and a reason to act quickly.
Together, these examples show that even in a crowded promotional landscape, menu remains a core traffic lever – and that clearly positioned items can rise above the noise without flashy add-ons.
The busiest weeks of 2025 show that even in a tough, value-conscious environment, limited-service restaurants still have multiple, proven ways to drive traffic. From clear deep discounts that rise above the noise to culture-led moments, narrative-driven merchandise, and well-timed menu strategies also delivered some of the year’s strongest results.
As QSRs and fast-casual chains look ahead to 2026, the data suggests that winning won’t hinge on any single tactic, but on choosing the right lever for the right moment, and executing it clearly enough to cut through a crowded landscape.
For more data-driven dining insights, follow Placer.a/anchor.
Placer.ai leverages a panel of tens of millions of devices and utilizes machine learning to make estimations for visits to locations across the US. The data is trusted by thousands of industry leaders who leverage Placer.ai for insights into foot traffic, demographic breakdowns, retail sale predictions, migration trends, site selection, and more.
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Indoor malls outperformed both open-air centers and outlet malls on a full-year basis as the only format to post visit gains during all four quarters – signaling a shift from recovery into growth.
Open-air shopping centers came in second – and though the format trailed indoor malls on a full-year basis, open-air shopping centers came out on top over the holidays, with Q4 visits up 2.0% year over year (YoY) and December traffic up 1.5%. This seasonal strength can be attributed to the format's sit-down and alcohol-forward dining options, which attract social holiday visits, as well as layouts that support quick trips and easy access to both essential and discretionary retail.
Meanwhile, outlet malls remained the weakest-performing format throughout 2025, with an annual traffic decline driven in part by a 1.1% drop in visits during the critical holiday season. This softness could reflect a broader shift in value perception. Price-conscious consumers may be increasingly weighing time cost alongside monetary savings, and long drives can offset the appeal of discounted pricing – particularly when promotions and loyalty incentives are widely available online and in traditional retail formats. To win consumers back, outlet malls may need to reduce the perceived time tradeoff by strengthening food and entertainment offerings and positioning themselves as curated, experience-driven value destinations rather than purely price-led ones.
Malls continue to resonate with a wide range of family segments, though different formats appeal to different household profiles. Across formats, higher-income and suburban family segments over-index among mall visitors. Indoor malls and open-air centers attract a disproportionate share of ultra-wealthy and affluent suburban households, underscoring malls’ ongoing relevance for consumers seeking family-friendly activities and experiences. Outlet malls, meanwhile, skew more heavily toward near-urban diverse families, reflecting their positioning as value-oriented destinations rather than lifestyle hubs.
At the same time, young professionals also play a meaningful role in mall traffic, over-indexing across all formats relative to their 5.8% share of the national population.
Across all formats, mall visitors also frequented mass merchants, big-box retailers, and off-price chains at high rates in 2025, underscoring that mall trips are often embedded within broader, multi-stop shopping routines rather than standing alone.
More than 70% of visitors across all mall formats also visited Walmart and Target at some point in 2025, and over half of mall visitors also visited Dollar Tree – underscoring how deeply mass merchants and discount chains are embedded in consumers’ retail lives. This indicates that malls face stiff competition as an everyday shopping destination. Malls that want to pull ahead in 2026 may focus on differentiating themselves from superstores by leaning into experiences and services that mass merchants cannot efficiently deliver – using tenant mix and programming to capture discretionary spend beyond routine retail needs.
Of the three formats, outlet malls showed the highest overlap with value-oriented and off-price chains, highlighting both their competitive pressure and their opportunity to redefine value. As discounted retail becomes increasingly ubiquitous, outlets can differentiate by extending value beyond merchandise—pairing sharp pricing with affordable dining, family-friendly entertainment, and experience-led programming that reinforces the outlet trip as a high-value day out, not just a bargain hunt.
Mall success in 2026 will likely hinge on maximizing the quality and purpose of each visit. Indoor malls are best positioned to double down on experiential retail, entertainment, and family-friendly programming that supports longer dwell times and higher discretionary spend. Open-air centers can continue to capitalize on convenience and dining-led visitation by optimizing for short, high-intent trips – particularly during peak seasonal periods.
For outlet malls, the opportunity lies in expanding the definition of value. As discounts become easier to access everywhere, outlets can differentiate by applying value thinking to food, entertainment, and experiences – turning the outlet trip into an affordable day out rather than a pure bargain hunt. Across all formats, operators and retailers that align tenant mix, layout, and programming with how consumers actually shop – across channels and formats – will be best positioned to capture wallet share in an increasingly fragmented retail landscape.
For more data-driven retail insights, visit placer.ai/anchor.
Placer.ai leverages a panel of tens of millions of devices and utilizes machine learning to make estimations for visits to locations across the US. The data is trusted by thousands of industry leaders who leverage Placer.ai for insights into foot traffic, demographic breakdowns, retail sale predictions, migration trends, site selection, and more.
At the start of 2025, expectations for retail were optimistic – focused on replacement cycles, a rebound in discretionary spending, and continued consumer strength. In reality, the year has been far more disruptive than that early narrative anticipated.
Consumers faced ongoing pressure from economic uncertainty, weather disruptions, employment concerns, and declining confidence. With consumers more connected to real-time news than ever, shoppers adjusted their retail decisions quickly as conditions changed, often taking a cautious, defensive approach to spending.
The discretionary side of the retail industry, also known as general merchandise, has shouldered most of the impact of changing consumer dynamics. As consumers looked to create a balance between their needs and their wants, oftentimes the “needs” won out. In general, visitation to non-discretionary categories has remained relatively stable, while there has been more volatility across the discretionary space.
The non-discretionary retail sectors benefited from value based models like value grocery chains and dollar and discount stores. Warehouse clubs emerged as the new one-stop-shop for consumers as superstores struggled to maintain in-store traffic. And fresh format grocery stores still found success with wealthier consumers and new store formats.
Despite the challenges overall, there have still been pockets of growth and emerging trends that have shaped the discretionary sector. And, despite a lot of stormy weather, consumers continue to maintain some level of resilience. In particular, the holiday season has been shaped by this unforeseen optimism despite the circumstances of many shoppers.
Here’s a look back at the trends and stories that shaped discretionary categories in 2025:
One of the most stark examples of the current retail climate continues to be the bifurcation of consumers. The retail industry, particularly in discretionary categories, has been bolstered by wealthier shoppers, as lower and middle income families become more discerning and stretched financially. This trend became more pronounced throughout 2025, and the second half of 2025 saw a large pullback by “aspirational” shoppers.
The luxury market has been greatly impacted by this trend, as visits by wealthier consumers haven’t been able to offset the decline by more infrequent, aspirational visitors. Overall visit growth to luxury apparel and accessories retailers slowed in Q3 when compared to 2024 levels, and those trends have continued into the holiday season.
According to Spatial.ai’s PersonaLive consumer segmentation, 2025 has seen a higher distribution of visits by Ultra Wealthy Families, Sunset Boomers, and Upper Suburban Diverse Families as there has been a contraction of visits by Near-Urban Diverse Families, and City Hopefuls. Aspirational shoppers who may have once saved for or set aside disposable income for luxury purchases may have had to shift those funds elsewhere as lower income shoppers become more financially strained.
Retailers are going to face more pressure next year as this bifurcation continues and consumer spending becomes more polarized. Full-price brands and those that fit somewhere in the middle are going to need creative solutions to court consumers, especially those who have become much more discerning this year.
The American retail landscape has long been associated with the wide array of specialty retailers that operate all across the country. Whether mastering American fashion, stories, or experiences, retailers have ingrained themselves into the fabric of consumers’ celebrations, gifts, and leisure time.
For many retailers that have led both media coverage and performance in 2025, success has come down to one simple concept: going back to their roots. Retail brands have always been synonymous with specialties, whether it be quality, styling, service, or expertise. Brands that have once again harnessed these elements to repair relationships with consumers and cement their brand value have been able to circumvent a lot of the economic challenges this year.
The return of Gap has been well documented this year, but it bears repeating because it has been remarkable. While all Gap Inc. brands are somewhere along the road to recovery, the flagship brand has been most impressive. Traffic in 2025 was up 1.1% compared to 2024, which is impressive after years of declines. The brand has focused its marketing and merchandising around the return of trend-right, high quality and affordable American fashion, and shoppers have bought in wholeheartedly.
Nordstrom, another top pick for 2025, cemented its place as a category expert and customer service titan. Whether it be the shoe department, the cafe, or the in-store experience, Nordstrom is once again a top-of-mind destination for shoppers, especially those who have higher levels of disposable income. The chain is benefiting from this return to form, with visits up 2.3% in 2025.
Finally, against all odds, Barnes & Noble has continued its momentum this year. As the industry to be first disrupted by e-commerce, the bookstore category has faced an uphill climb after losing major retail chains and a strong digital presence. Barnes & Noble has been able to harness the power of in-store experience to cement itself as part of the consumers’ communities. As shoppers increasingly look to the retail industry as a third place for socializing, the chain has been able to adapt to keep customers in stores for longer.
With uncertain economic conditions, consumers have been much more discerning about discretionary purchases in 2025 – but still crave the concept of treating themselves. Self-gifting has been on the rise for the past few holiday seasons, but 2025 signaled that even when consumers are more intentional about purchasing, they still crave that joy of the shopping experience.
Small indulgence categories have been on the rise or rebound since the second half of 2025. Beauty, in particular, saw a turn in its business as consumers became more discerning. Beauty has always been synonymous with challenging economic times for consumers, with the “lipstick index” often seen as a barometer for consumer sentiment. Beauty’s rebound could very well continue into 2026 if consumers look for those small ways to update their look and satisfy their need to shop.
Collectibles can also fit into the small indulgence category, especially with 2025’s hottest item, Labubu. Although the viral sensation from retailer POP MART became almost impossible to secure, the price point was attainable for most consumers. Similarly, Trade Joe’s viral mini tote bag also comes at a low price point, at $2.99, and consumers continue to flock to the brand’s stores to purchase during the bag's drops in spring and fall.
The pet category has also had a strong 2025 performance, which can somewhat be attributed to the small indulgence trend. Consumers tend to pull back on self-purchasing, but will often limit the impact felt by pets or children. The pet category has not seen much change in consumer behavior and this trend is likely to continue into 2026.
At the start of 2026, discretionary retail has not so much rebounded as recalibrated. The year revealed a consumer who is highly informed, highly selective, and increasingly comfortable walking away – forcing retailers to compete not just on price or promotion, but on relevance. The winners were not those that chased volume at all costs, but those that clearly articulated why they exist, who they serve, and what role they play in consumers’ lives.
Looking ahead to 2026, the forces that shaped this year – income bifurcation, cautious spending, and the prioritization of emotional value – are likely to intensify. Retailers operating in the middle will face the greatest test, as consumers continue to polarize between value-seeking and premium experiences. Growth will likely come from precision: sharper assortments, clearer brand positioning, and formats that respect both consumers’ financial realities and their desire for moments of joy.
For more data-driven retail insights, visit placer.ai/anchor.
Placer.ai leverages a panel of tens of millions of devices and utilizes machine learning to make estimations for visits to locations across the US. The data is trusted by thousands of industry leaders who leverage Placer.ai for insights into foot traffic, demographic breakdowns, retail sale predictions, migration trends, site selection, and more.
Between May of 2021 and November of 2025, The Home Depot saw year-over-year (YoY) visits down 50 of 55 months. The initial downturn was likely driven by the intense pull forward of demand during the pandemic, while the latter struggles were driven by a combination of economic headwinds and sector specific challenges. But, however you contextualize the issues, the result was an average monthly decline of 3.6% YoY from May 2021 to April 2025, despite the final months of that period taking place during the retailer’s normal annual visit peak.
But, there were also very positive signs during that period. The weeks prior to Liberation Day saw YoY visit increases of 2.5% and 4.6%, before tariff concerns drove significant declines, and those declines continued with 14 of the next 15 weeks seeing YoY visit drops.
So where are the signs of a sleeping giant?
For one, visits are getting better. The visit gap between May and November 2025 shrunk to just 0.5% – essentially flat.
Then November saw a visit jump of 3.8%, and the strength was part of a sustained effort, with the eight week period from October 20th to the week beginning December 9th seeing consistent YoY visit increases.
In addition, this strength during the holiday period gives added emphasis to the thinking that Home Depot’s return to growth could have been much earlier were it not for the tariff obstacles that appeared in March and April.
Great brand, clear market leadership and smoother sailing? Sounds like a recipe for a 2026 winner.
In the first half of 2025, Starbucks monthly visits were down 0.6% on average. In the first five months of the second half, that number jumped to being up 1.6%, including a 14 week period between September 1st and the week beginning December 1st where the coffee giant saw visits up 12 of 14 weeks driving October and November visits up 3.2% on average YoY. For context, Q4 2024 was down 2.9% YoY.
The takeaway?
There was real reason to be excited about the directional shifts CEO Brian Niccol built his Back to Starbucks strategy around. The concepts resonated and hearkened back to a Starbucks experience that would leverage its unique brand and status. But ultimately, the excitement needed to center around the belief that these strategies could work and be executed effectively.
The last few months have been a powerful indication that those who held this belief were justified. Visits didn’t improve because of strong coffee headwinds, they improved because Starbucks did what they do best – they owned the calendar and leveraged their creativity and brand to drive huge visit spikes. Cups – whether of the Red or Bearista variety – and menu shifts including the epic annual PSL launch drove visit surges, and the chain's massive footprint positioned it to dominate on major shopping days like Black Friday.
TLDR – the new strategy sounded exciting, there’s real evidence that it’s working, and the chain has maintained its unique hold on the calendar and an industry leading ability to drive urgency and visits almost at the flick of a switch. Lots of reasons to expect the Starbucks recovery to continue gaining momentum.
For more data-driven insights, visit placer.ai/anchor.
Placer.ai leverages a panel of tens of millions of devices and utilizes machine learning to make estimations for visits to locations across the US. The data is trusted by thousands of industry leaders who leverage Placer.ai for insights into foot traffic, demographic breakdowns, retail sale predictions, migration trends, site selection, and more.
Craft retailers – one of the top destinations for purchasing holiday decor – posted impressive year-over-year (YoY) gains this holiday season: AI-powered location analytics reveals that visits to industry leaders Michaels and Hobby Lobby were up YoY by double-digits almost every week of the holiday season. And while some of these chains' success is likely due to the reduced competition – with Party City having ceased its operations earlier this year – the strong growth also suggests that, despite digital competition, the demand for physical browsing and festive inspiration remains high.
We dove into the data to analyze how the holiday decor market is evolving.
The 2025 closures of Party City and JOANN consolidated the crafting sector, leaving Michaels and Hobby Lobby with fewer competitors and driving up YoY visits. This market shift proved particularly advantageous in Q4 as shoppers seeking Halloween decorations and holiday trimmings flocked to the remaining specialty retailers.
But Michaels and Hobby Lobby's success is due to more than just a market consolidation – the two chains have cemented themselves as premier destinations for holiday home decor. And while these retailers have traditionally relied on families looking to fill suburban homes with seasonal cheer, AI-powered location analytics reveal that younger, more urban shoppers are also fueling the holiday traffic boost.
Focusing on October and November data reveals that both chains saw the share of "households with children" in their captured market dip between 2024 and 2025, while the share of Young Professionals and Young Urban Singles increased. This suggests that at least some of the holiday decorating in 2025 was fueled not just by family traditions, but also by a younger generation curating their spaces with viral, budget-friendly finds.
While the exit of competitors like Party City and JOANN cleared the playing field in 2025, Michaels and Hobby Lobby's success is due to more than just absorbing the displaced demand. By capturing a new wave of young, urban shoppers hunting for viral trends, these retailers have proven that holiday décor is no longer solely the domain of suburban families. This successful pivot from traditional utility to trend-driven destination suggests that the craft sector isn't just surviving the retail shakeout; it is effectively reshaping itself for a new generation of consumers.
For more data-driven insights, visit placer.ai/anchor.
Placer.ai leverages a panel of tens of millions of devices and utilizes machine learning to make estimations for visits to locations across the US. The data is trusted by thousands of industry leaders who leverage Placer.ai for insights into foot traffic, demographic breakdowns, retail sale predictions, migration trends, site selection, and more.
7 Brew Coffee may be the fastest-growing coffee chain in the US right now. The chain surged from just 14 locations at the start of 2022 to around 500 locations by October 2025. And average visits per location also increased significantly – indicating that despite the breakneck expansion, the drive-thru brand still has significant runway left to grow.
The chain's hypergrowth has been fueled by significant capital, including an equity investment from Blackstone in 2024 and a massive franchise agreement with the Flynn Group to develop an additional 160 stores. With a modular building model that allows for rapid deployment, 7 Brew is positioned to aggressively challenge major drive-thru competitors like Dutch Bros and Scooter's Coffee.
7 Brew's success can also be linked to a broader rise in drive-thru-centric coffee concepts. The chart below illustrates the shifting category dynamics in recent years as leading drive-thru coffee chains – with Dutch Bros in the lead – commanding a growing share of overall coffee visits since 2019.
Even amid the broader rise of drive-thru coffee chains, 7 Brew’s growth continues to stand out. While the brand still holds a relatively small share of the overall coffee market, the brand’s proportional growth outpaces its peers, reflecting both aggressive unit expansion and strong consumer adoption. The chart also underscores how 7 Brew is increasingly carving out space within a segment historically dominated by brands like Dutch Bros – suggesting meaningful long-term competitive potential.
With drive-thru coffee continuing to surge in popularity and consumers gravitating toward convenience-forward formats, 7 Brew is well positioned to continue capturing incremental market share and solidifying its status as one of the fastest-rising brands in the category.
For more data-driven retail insights, visit placer.ai/anchor.
Placer.ai leverages a panel of tens of millions of devices and utilizes machine learning to make estimations for visits to locations across the US. The data is trusted by thousands of industry leaders who leverage Placer.ai for insights into foot traffic, demographic breakdowns, retail sale predictions, migration trends, site selection, and more.
The dining industry showcased its agility over the past couple of years as it rapidly adapted to shifts in consumer preference brought on by COVID and rising prices. And with a new year around the corner, the pace of change shows no signs of slowing down.
This white paper harnesses location analytics, including visitation patterns, demographic data, and psychographic insights, to explore the trends that will shape the dining space in 2024. Which dining segments are likely to pull ahead of the pack? How are chains responding to changes in visitor behavior? And where are brands driving dining foot traffic by taking advantage of a new advertising possibility? Read on to find out how dining leaders can tap into emerging trends to stay ahead of the competition in 2024.
Comparing quarterly visits in 2023 and 2022 highlights the impact of the ongoing economic headwinds on the dining industry. The year started off strong, with year-over-year (YoY) dining visits up overall in Q1 2023 – perhaps aided by the comparison to an Omicron-impacted muted Q1 2022. And while overall dining growth stalled in Q2 2023, several segments – including QSR, Fast Casual, and Coffee – continued posting YoY visit increases, likely bolstered by consumers trading down from pricier full-service concepts.
Foot traffic slowed significantly in Q3 2023 as inflation and tighter consumer budgets constrained discretionary spending. Overall dining visits fell 2.4% YoY, and full-service restaurants – with their relatively high price point compared to other dining segments – seemed to be particularly impacted by the wider economic outlook. But the data also revealed some bright spots: Fast Casual still succeeded in maintaining positive YoY visit numbers and Coffee saw its Q3 visit grow an impressive 5.4% YoY. As the return to office continues, a pre-work coffee run or lunchtime foray to a fast-casual chain may continue propelling the two segments forward.
Restaurant visitation patterns have evolved over the past few years. Although an 8 PM seating was once the most coveted slot at fine-dining restaurants, recent visitation data suggests that sitting down to dinner earlier is rising in popularity.
But among the QSR segment, the opposite trend is emerging, with late-night visits rising. Analyzing hourly foot traffic to several major QSR chains reveals that the share of visits between 9 PM and 12 AM increased significantly between Q3 2019 and Q3 2023. Even Taco Bell – already known for its popularity among the late-night crowd – saw a substantial increase in late-night visits YoY – from 15.4% to 20.3%.
Who is driving the late night visit surge? One reason restaurants have been expanding their opening hours is to capture more Gen-Z diners, who tend to seek out nighttime dining options. But location intelligence reveals that younger millennials are also taking advantage of the later QSR closing times.
An analysis of the captured market for trade areas of top locations within one of Taco Bell’s major markets – the Chicago-Naperville-Elgin, IL-IN-WI Metropolitan area – reveals a year-over-four-year (Yo4Y) increase in “Singles & Starters.” The “Singles & Starters” segment is defined by Experian: Mosaic as young singles and starter families living in cities who are typically between 25 and 30 years old. As consumers continue to prioritize experiential entertainment and going out with friends, late-night dining may continue to see increased interest from young city-dwellers.
Millennials and Gen-Z consumers aren’t only heading to their favorite fast food joint for a late-night bite – these audience segments are also helping drive visits on the weekends. Smoothie King is one chain feeling the benefits of young, health-conscious consumers.
The chain, which opened in New Orleans, LA, in 1973 as a health food store, has since grown to over 1,100 locations nationwide and is currently expanding, focusing on the Dallas-Fort Worth CBSA. The area’s Smoothie King venues have seen strong visitation patterns, particularly on the weekends – weekend visits were up 3.4% YoY in Q3 2023. The smoothie brand’s trade areas in the greater Dallas region is also seeing a YoY increase in weekend visits from “Young Professionals” – defined by the Spatial.ai PersonaLive dataset as “well-educated young professionals starting their careers in white-collar or technical jobs.”
While some dining chains are appealing to the late-night or weekend crowd, others are driving visits by appealing to sports lovers. How have recent rule changes around student athletes changed the restaurant game, and how can college football teams drive business in their hometowns?
College sports have long been a major moneymaker, with top-tier teams raking in billions of dollars annually. And as of 2021, college athletes can enjoy a piece of the significant fan following of college sports thanks to the change in the NCAA’s Name, Image, and Likeness (NIL) rules, which now allows student athletes to sign endorsement deals.
Since then, multiple restaurants have jumped on the opportunity to partner with student athletes, some of whom have millions of followers on Instagram and TikTok. Chains like Chipotle, Sweetgreen, Slim Chickens, and Hooters have all signed college athletes to various brand deals.
How can brands ensure they partner with athletes their customers will want to engage with? Analyzing a chain’s audience by looking at the interests of residents in a given chain’s trade area can reveal which type of athlete will be the most attractive to each brand’s customer base. For example, data from Spatial.ai: Followgraph provides insight into the social media activity of consumers in a given trade area and can highlight desirable partnerships.
Examining the trade areas of Chipotle, Sweetgreen, Slim Chickens, and Hooters, for instance, reveals that Sweetgreen’s visitors tended to have the largest share of Women’s Soccer followers. Conversely, Sweetgreen’s trade area had lower-than-average shares of College Football Fans or College Basketball Fans, while residents of the trade areas of the other three chains showed greater-than-average interest in these sports. Leveraging location intelligence can help companies choose brand deals that their customers resonate with and find the ideal athletes to represent the chain.
Finding the right college athlete partnership is one way for dining brands to appeal to college sports enthusiasts. But dining chains and venues located near major college stadiums also benefit from the popularity of their local team by enjoying a major game day visit boost.
One of the country’s most popular college football teams, the Ohio State Buckeyes, can draw millions of TV viewers, and its stadium has a capacity of 102,780 – one of the largest stadiums in the country. And while tailgating is a popular activity for Buckeyes fans, nearby restaurants are some of the biggest beneficiaries of the college football craze. Panera experienced a 235.3% increase on game days as compared to a typical day, Domino’s Pizza visits grew by 283.3%, and Tommy’s Pizza, a local pie shop, saw its visits jump by a whopping 600.9%.
This influx in diners also causes a major shift in game day visitor demographics, as revealed by changes in visitors at dining venues located near stadiums of two of the nation’s best college football teams – the Ohio State Buckeyes and Ole Miss Rebels. Based on Spatial.ai: Personalive data for the captured market of these dining venues, game day visitors tended to come from “Ultra Wealthy Families” when compared to visitors during a typical non-game day in September or October.
The analysis indicates that popular sporting events create a unique opportunity for restaurants near college stadiums to attract high-income customers game day after game day, year after year.
While some spend game day tailgating or visiting a college restaurant, others hold a viewing party – with a six-foot submarine. And the sub’s popularity extends beyond Superbowl Sundays. Sandwich chains including Jersey Mike’s, Firehouse Subs, Jimmy John’s, and Subway (recently purchased by the same company that owns Jimmy John’s) have seen sustained YoY increases in visits and visits per venue in the first three quarters of 2023.
Some of the growth to these chains may be related to their affordability, a draw at all times but especially during a period marked by consumer uncertainty and rising food costs. And subway leaders seem to be seizing the moment and striking while the iron is hot – Jersey Mike’s opened 350 stores in 2023 and still saw its YoY visits per venue grow by 6.6%. And Subway reported ten consecutive quarters of positive sales, a promising sign for its new owner.
The love for a healthy, affordable sandwich extends across all income levels, with all four chains seeing a range in their visitors' median household income (HHI). Out of the four chains analyzed, Jersey Mike’s – which has long prioritized a suburban, middle-income customer – had the highest trade area median household income of the four chains at $77.3K/year. Subway, known for its affordability, had the lowest, with $62.9K/year. The variance in median HHI combined with the strong foot traffic growth shows that when it comes to sandwiches, there’s something for everyone.
Persistent inflation and declining consumer sentiment may pose serious challenges for the dining space, but emerging trends are helping boost some restaurants. Customers seeking out a late-night bite drive visits to QSR chains, and health-conscious diners are boosting foot traffic to smoothie bars and sandwich shops. Meanwhile, sports sponsorships and game-day restaurant visits can provide a boost to dining businesses that take advantage of these opportunities.
“Retail media networks have turned retailers into ad moguls. That’s a huge change and nobody yet understands all the implications of it.”
Constantine von Hoffman, MARTECH
Companies operating consumer-facing brick-and-mortar venues traditionally relied on selling goods and services as their primary revenue stream. But recently, leading retailers such as Walmart and Target have begun to leverage their immense store fleet into a powerful advertising platform.
Online retailers have been tapping into the advertising power of their digital sites for years by relying on various automated tools to show third-party advertisements to relevant consumer segments. But now, retailers with a strong offline presence can also leverage physical marketing impressions and focus their campaigns while reaching consumers at the point of purchase. Retailers have long recognized the intent that drives a store visit, and understanding the full value of leveraging that visit to its full extent is an important new frontier.
Major retailers are continuing to see their physical visits outnumber their online ones.
And in spite of the gloomy predictions regarding the future of brick and mortar retail, major retailers are continuing to see their physical visits outnumber their online ones. Monthly numbers of visitors to Walmart and Target significantly outpace the brands’ online reach, according to web data from Similarweb. So although, up until recently, these brands have focused their media placements on their digital channels, it is becoming increasingly clear that these chains’ physical stores hold powerful – and currently untapped – advertising potential.
Online visitor data source: similarweb.com
And with the recent rise in digital advertising costs, retail media networks are becoming more attractive for companies looking to make the most of their ad budget. Retail media networks can also help brands reach rural communities, elderly Americans, and other consumer segments that are currently underserved by digital advertisers.
This white paper explores several retailers on the cutting edge of the retail media network revolution. Keep reading to find out how advertisers can use retail media networks to promote to hard-to-reach consumers, segment their ad spending, and optimize their campaigns.
Residents of rural areas use the internet less frequently, and have lower levels of technology ownership than their urban and suburban counterparts. As a result, companies that stick to digital advertising may have a harder time reaching rural consumers. Brick and mortar retailers popular in smaller markets can fill in the gaps and help brands promote their products and services to this hard-to-reach audience.
Brick and mortar retailers popular in smaller markets can help brands advertise to hard-to-reach audiences.
Dollar General saw significant success over the pandemic, with the current economic climate continuing to benefit the brand. Between January and August 2022, nationwide visits to Dollar General venues were 35.6% higher than they were between January and August 2019, while the number of visitors increased 25.4% in the same period.Visit numbers aggregate the visits to the chain’s various locations in a given period, while visitor numbers track the number of people who enter the brand’s stores.
The company has also been operating a media network since 2018. The Dollar General Media Network (DGMN) enables advertisers to reach Dollar General consumers across the company’s channels to build awareness both digitally and in physical spaces. Advertisers with DGMN can display in-store bollard, blade, and wipe stand signs, security pedestals, basket bottomers, and shelfAdz to deliver in-store messaging from parking lot to purchase. Recently, Dollar General announced that its ad platform was now working with 21 new advertising partners, including Unilever, General Mills, Hershey’s, and Colgate-Palmolive.
Embracing the Power of the Small Market
Advertising partners can leverage the DGMN to promote their goods and services to harder-to-reach consumers.
Dollar General has been serving rural residents for years, with the majority of the company’s stores located in communities with fewer than 20,00 residents. And while the brand is growing nationwide, Dollar General’s strength is particularly evident in small markets – which means that advertising partners can leverage the DGMN to promote their goods and services to harder-to-reach consumers.
Comparing year-over-three-year (Yo3Y) visit change to Dollar General stores in metropolitan and micropolitan core based statistical areas (CBSAs) highlights the company’s success in smaller markets. According to the United States Office of Management and Budget, metropolitan and micropolitan CBSAs have over and under 50,000 residents, respectively. Since January 2022, monthly Yo3Y visit growth to Dollar General venues in select Texas micropolitans has consistently outpaced foot traffic to nearby metropolitan areas. While the Sherman-Denison metro area saw August 2022 foot traffic hit a solid 24.5% increase over August 2019, the Gainesville, Texas micro area – around 35 miles east of Sherman – saw its foot traffic increase 54.5% in the same period.
Dollar General’s presence across a significant number of smaller markets means that advertising partners can use the growing DGMN to increase awareness and drive purchase consideration among these harder-to-reach consumers.
In the digital space, three tech giants – Alphabet (previously Google), Meta (previously Facebook), and Amazon – enjoy over 60% of the digital ad revenue in the United States. This means that companies are competing for impressions on a small number of platforms – and smaller brands geared at specific consumer segments may need to spend significant advertising budgets to outbid the larger players. Retail media networks create additional advertising platforms, and enable advertisers to diversify their ad spend, increase their (physical) impressions, focus on more specialized channels to better reach their audience, and potentially reach customers at their highest point of intent.
Retail media networks create additional advertising platforms and potentially reach customers at their highest point of intent.
Albertsons launched its retail media network, Albertsons Media Collective, in November 2021 with the goal of delivering “digitally native, shopper-centric and engaging branded content to the company’s ever-growing network of shoppers.” Currently, the grocer’s media network is primarily digital, but Albertsons’ head of retail media products Evan Hovorka recognizes the importance of leveraging in-store assets to deliver a unique advertising experience. The company is testing out smart carts that link with “Albertsons for U” loyalty program to display ads to shoppers – and Albertsons is likely to find more ways to reach in-store consumers as it continues to develop its retail media network.
The chain is also one of the most popular grocers nationwide. With the exception of March and April 2022, when inflation and high gas prices temporarily halted growth, the brand’s monthly visits and visitor numbers have consistently exceeded pre-pandemic levels. Monthly visits for Albertsons in August 2022 were up 5.7% and monthly visitors were up 5.4% on a Yo3Y basis. This means that advertisers with Albertsons can increase their reach and grow their physical ad impressions just by displaying their ads in Albertsons locations and tapping into the chain’s growing visitor base.
Looking beyond Albertsons' nationwide average foot traffic trends reveals some important regional differences. Between January and July 2022, visits to the brands increased 4.6% in Wyoming on a Yo3Y basis, while foot traffic to the brand’s locations in Oregon jumped 18.5% compared to January through July 2019. This means that a brand looking to reach consumers in Oregon can contract with Albertsons’ media network to show its ads to a fast-growing pool of visitors.
A larger visitor count translates to an increase in unique ad impressions, while more visits from fewer visitors can drive repeated exposures.
Diving deeper into the data reveals an additional layer of insight. Some states with only moderate visit growth are seeing a surge in visitor numbers, while other states are seeing a drop in visitor numbers but a rise in visits. A larger visitor count translates to an increase in unique ad impressions and more people exposed to the ads, while more visits from fewer visitors translates to more overall impressions that can drive repeated exposure among a smaller group of visitors. So advertisers can use segmented foot traffic data to decide where to focus their marketing depending on the goal of the campaign.
For example, Wyoming's moderate increase in visits hides a significant spike in visitors, which means that advertisers to Albertsons venues in Wyoming can get their impressions before a large number of different potential consumers. Meanwhile, Oregon's 18.5% increase in visits is the result of just a 9.4% increase in visitors – so Albertsons is cultivating an increasingly loyal following in the Beaver State, and the grocer’s advertising partners can expect that the same visitors will be exposed to their brand repeatedly.
So companies that want to increase unique ad impressions and build awareness can advertise to Albertsons customers in Wyoming, where their ads will be seen by a large number of new people. But in Oregon, companies may want to promote a campaign that focuses on moving Albertsons visitors through their funnel.
In order to accurately assess the ad distribution patterns in each location, brands operating retail media networks need to understand both visits and visitors trends in each region and for the chain as a whole.
Advertisers with retail media networks can use foot traffic data to refine their geographic audience by identifying the consumer preferences of a given brick-and-mortar brand on a store or city level.
In August 2020, CVS Pharmacy launched its media network, the CVS Media Exchange (cMx). The company estimates that 76% of U.S. consumers live within five miles of at least one store, and the cMx allows partners to tap into the chain’s reach by giving advertisers access to CVS’ online and offline channels, including in-store ads.
Although CVS has been closing locations recently, the brand is still one of the strongest players in the brick-and-mortar retail space. Its 2022 visit numbers have consistently exceeded pre-pandemic levels nationwide, and data from CVS locations in leading cities shows that its Yo3Y visits per venue and visitor numbers are even higher.
CVS’s nationally distributed fleet means that the brand’s locations in different regions attract distinct consumer bases.
CVS carries a varied product mix of daily essentials in addition to its healthcare offerings, so the brand attracts a wide range of consumer segments. And the chain’s nationally distributed store fleet means that CVS has locations in different regions that attract distinct consumer bases who do not all have the same lifestyle preferences. By using foot traffic data to understand the regional consumer preferences of CVS consumers beyond the store, advertising partners can refine their market and make the most of the cMx.
Different regions have different fitness cultures. Chains catering to health-conscious consumers can use retail media networks and foot traffic data to focus their efforts on areas where inhabitants exhibit a high demand for regular workouts.
Analyzing cross-visit data from CVS locations across five major urban centers in the U.S. shows that the percentage of those who also visited gyms or fitness studios varied significantly across each DMA. In the New York area, 62.7% of those who visited CVS in Q2 2022 also visited a fitness venue during that period, in contrast with only 38.0% of CVS visitors around Dallas-Ft. Worth, TX in the same period. This information can help advertising partners in the health and wellness space decide where to place their campaigns.
Looking at cross-visit data on a city-wide level can provide a sense of the consumer culture in each area, but advertisers that dive into foot traffic data for individual stores can refine their messaging even further.
On average, 43.8% of CVS visitors in the Chicago DMA also visited a gym in Q2 2022. But drilling down to the top CVS locations in the city reveals that the rate of cross-visits varies significantly from location to location. Both the E 53rd Street and W 103rd Street locations have a relatively high share of visitors who visit fitness locations – 52.5% and 49.2%, respectively. Meanwhile fitness cross-visits were at just 36.6% for the South Stony Island Avenue location. Advertisers promoting health and wellness related products and services may want to focus on the 103rd St. and 53rd St. CVS locations.
Diving into a customer’s behavior and preferences outside the store can help retail media network operators and advertising partners find the areas and locations best suited for each type of ad.
Cross-visit data is one way to identify consumer preferences beyond the physical store. Advertisers can also analyze digital preferences of offline visitors to focus their marketing on the most appropriate locations.
Advertisers can also analyze digital preferences of offline visitors to focus on the most appropriate locations.
Over the past couple of years, Macy’s has been finding ways to reinvent itself and optimize its store fleet – and foot traffic data indicates that the retailer's efforts are paying off. In the first half of 2022, Macy’s exceeded its H1 2021 overall visit and average visits per venue numbers and posted a positive year-over-year (YoY) visitor count. In Q2 2022, despite the wider economic challenges, Macy’s visitors, visits, and average visits per venue saw YoY increases of 3.4%, 4.0% and 9.9% increases.
Like CVS, Macy’s launched its media network in August 2020, and by February 2021 the Macy’s Media Network was already generating $35 million annually. In addition to advertising on the company’s digital channels, Macy’s also offers partners the use of in-store screen displays, package inserts, and the brand’s iconic billboard in New York City’s Herald Square.
Advertisers can optimize their advertising by analyzing the differences in consumer profiles between a chain’s various stores.
Advertisers that understand the differences in consumer profiles between a chain’s various stores can optimize their advertising efforts. While looking at variations in cross-visit trends is one way to identify interested brick-and-mortar consumers, diving into visitor’s digital behavior and online preferences can also provide valuable insights.
Tools such as Spatial.ai’s GeoWeb, which tracks online engagement with various trends and topics by neighborhood, can reveal how offline consumers behave online. An index score of 100 indicates that consumers in an area have an average interest in a given topic, while scores over (or under) 100 indicate that consumers are more (or less) interested in the topic when compared to the national average interest.
We used Spatial.ai’s GeoWeb tool to analyze the online behavior of consumers in the True Trade Areas (TTA) of five Macy’s locations in the Philadelphia, PA DMA – and found that residents of the different TTAs stores showed differing indexes. For example, the Macy’s in the King of Prussia Mall location showed a high index of 161 in “Men’s Business Clothes Shoppers,” while the Cottman Ave. location had an only slightly above average index of 102. This means that advertisers of men’s business apparel may see more results by focussing their advertising on visitors to the King of Prussia location.
Advertisers that use retail media networks do a lot more than just reach in-store shoppers. Stores exist in the physical world, so advertisers can also reach passers-by through physical venues’ windows, blade signs – or in the case of Macy’s, through its Herald Square Billboard. Here too, foot traffic data can reveal the consumer preferences of people walking by the sign.
We looked at the online behavior in the TTA around the traffic pin on the corner where the billboard is located (Broadway/6th Ave and 34th Street in New York) to understand which advertisers might benefit most from a billboard at that location. While the “Men’s Business Clothes Shoppers” category was over-indexed compared to the national average, as would be expected in midtown Manhattan, “Women’s Fashion Brand Shoppers” had an even higher index. “Gen Z Apparel Shoppers” were over-represented, but “Leather Good Shoppers” and ”Athleisure Shoppers” were under-represented. So a brand that carries both elegant wear and athleisure may want to display its less casual clothing lines on the billboard.
Understanding how consumers behave both on and offline can help retail media networks and advertising partners promote their campaigns most effectively.
To transform their physical store fleet into a media network, brands and companies need to analyze the reach of each venue. The same chain operating in multiple regions may be reaching different types of consumers in each area, or even in various neighborhoods of the same city. These distinct audiences may have contrasting products, brands, and shopping preferences.
Retailers that leverage their brick and mortar presence can transform the advertisement space as it exists today.
Retailers can also partner with advertising partners who wish to promote goods and services not carried by the retailer. For this to succeed, the retailer will need to analyze how consumers behave outside of its stores. Understanding what characterizes the overall behavior of consumers in each locations’ trade area will allow the retailer to reach a larger audience and truly compete with the digital giants. And by leveraging their brick and mortar presence, brick and mortar retail can transform the advertisement space as it exists today.
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.
