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Placer Bytes: Target, Old Navy, & Payless

by 
Ethan Chernofsky
 on 
January 27, 2020
Placer Bytes: Target, Old Navy, & Payless

Few retail stories dominated the headlines like the news of Target’s rough holiday reason and Gap’s decision to keep Old Navy within the fold.

But what does the data tell us about these stories?

How Disappointing was Target’s Holiday Season?

Target did not have the best day earlier this month when it announced its holiday season performance. In a blog post, Target CEO Brian Cornell said, “While we knew this season was going to be challenging, it was even more challenging than we expected.”

Looking at year-over-year data, November and December did see a drop of over 1% in visits to Target stores nationwide when comparing 2018 to 2019. And while this certainly isn’t a positive result for Target, it needs to be seen within context. 

The brand saw overall year-over-year growth from 2017 to 2018 and again from 2018 to 2019, building on an especially strong back-to-school season. And the 2019 holiday period started nearly a week later, cutting down the overall number of shopping days. 

So how bad was the performance? In actuality, not bad at all.

Looking at year-over-year data, there is an improvement on many key shopping days, including Black Friday and the build-up into Christmas. Black Friday visits jumped to 183.9% above the baseline compared to 162% the year before for the period of January 2017 through December 2019. So, while the overall numbers may be down, digging deeper shows the brand’s results are actually fairly impressive given the context.

Which is even better for us, given our prediction of a glowing 2020 for Target.

Old Navy and Gap Stick Together

When Gap CEO Art Peck announced he was leaving the company late in 2019, rumors swirled about what the news would mean for Old Navy’s spin-off from the Gap umbrella. And unsurprisingly, the change in leadership also came with a change of heart. 

Why? While the true reasons may never be revealed, the data shows that Old Navy is still a very strong asset. In a time when many apparel retailers are struggling, especially those with a large offline footprint, Old Navy has performed well. Visits have stayed relatively steady, including some significant peaks in 2019 when comparing traffic data year-over-year.

The brand even saw growth year-over-year in November, a month where a shortened holiday period impacted many retailers across the country. Visits were 23.4% above the baseline in November 2019, surpassing November 2018’s 19.4%.

Does this mean Old Navy is destined to buoy Gap into a giant 2020? No.  But it does give insight into the hesitancy by the Gap leadership to part with a retail asset that has shown significant staying power in a high growth market of lower-priced apparel.

Does it Really Feel Good to Payless?

Points to anyone who recognizes the joke, but more importantly Payless is out of bankruptcy once again. Will the third time be the charm? Maybe. But it will require some serious changes.

Traffic to Payless locations saw a massive drop in late 2019. When taking the period from January 2017 through December 2019, the final three months of the year brought in traffic that was 32.3%, 28.9% and 12% below the baseline. This is dramatically lower than visits in 2018 that were 7.4%, 7.9% and 31.5% above the baseline for the period. 

This means that even for a struggling retailer, the end of 2019 was an especially difficult period. Yet, as anyone who appreciated the aforementioned headline knows - there is still significant brand awareness for the company. Utilizing this as a foundation for a turnaround is an excellent start, but just as important will be focusing more on the core audiences and how to optimize their retail footprint to be as close as possible to this audience.

Can Target drive holiday success in 2020? Will Old Navy pay off Gap’s newfound faith? Will Payless rebound?  Sign up free at Placer.ai to find out.

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