With Amazon’s Prime Day, Target Deal Days, Best Buy’s Black Friday in July, and Walmart’s Plus Week all coming up – and Back to School around the corner – we dove into the retail foot traffic data to see what we can expect from these summer sales events.
Retail Overview at the (Almost) Halfway Point
January 2023 started the year off strong – but over the past several months, retail foot traffic has lagged behind previous years as the ongoing inflation continues to strain consumer budgets. Still, holidays have maintained their potential to drive traffic spikes.
Although the first half of the year tends to be somewhat devoid of major sales events, the data reveals that special occasions drove consumers to stores. Even holidays not traditionally associated with discounts – Valentine’s Day, Easter, Mother’s Day, Father’s Day, and even St. Patrick’s Day – brought a spike in retail visits. Meanwhile, Memorial Day – typically the first major sales event of the year – saw a relatively subdued increase.
This could indicate that 2023 consumers are being exceptionally intentional with their spending, and visiting stores to buy gifts, chocolates, and other specific items for particular occasions instead of browsing the sales aisles for impulse buys. At the same time, the gap between previous years’ retail foot traffic levels and 2023 visits has narrowed in recent weeks – which may signal that consumers are tiring of their shopping discipline and gearing up to hit the stores. And the retail foot traffic spikes seen on the major and minor holidays during the first half of 2023 could also mean that newly disciplined shoppers are looking for an excuse to engage in some retail therapy.
What does this mean for Prime Day and other promotional events coming up in July? Many consumers have delayed big-ticket items in recent months due to high interest rates and the larger macroeconomic situation, and these shoppers may use the July sales as opportunities to purchase these items at a discount. And with Back to School coming up, parents are likely to take advantage of the markdowns to stock up on children’s clothing and school supplies. But shoppers may also be more careful with their spending than in previous years and make fewer expensive impulse purchases. And with some consumers looking for a reason to shop without breaking the bank, more affordable categories such as apparel and beauty – which are not typical major Prime Day winners – may receive a significant boost.
Diving into Key Retail Categories
Analyzing weekly retail visits to key categories also suggests that beauty and apparel are likely to do quite well during the upcoming sales events. Of the nine sectors analyzed, the Beauty and Self Care category is the only one to have seen positive year-over-year (YoY) weekly visits over the past seven weeks. Apparel (Excluding Department Stores) has also seen its YoY visit gap shrink, with visits the week of June 12-18 up 1.8%.
Pet Stores & Services, Office Supplies, and Home Improvement have all seen their YoY visit gaps hover around 8%, which could mean that consumers are visiting brick-and-mortar outlets in these categories to make essential purchases but holding off on the more discretionary items. But the right discount may convince some shoppers to upgrade their grill or splurge on a new toy for their pet.
The more purely discretionary categories – Recreational & Sporting Goods, Hobbies, Gifts & Crafts, Electronics, and Furniture & Home Furnishings – all started May 2023 with significant YoY visit gaps that progressively narrowed over the past seven weeks. And while some of the shrinking visit gaps may be due to Father’s Day – which fell over the week of June 12-18 – the positive trend may also indicate that consumers are slowly beginning to spend on non-essentials once again. This could bode well for Prime Day, July 4th, and other upcoming sales events, as more and more consumers may be looking for an excuse to scratch the shopping itch and splurge on some low-cost discretionary items.
How Are Prime Day’s Leading Offline Competitors Positioned?
Amazon’s Prime Day – on July 11 and 12 this year – takes place mostly online, although the company’s network of brick-and-mortar stores will also offer discounts. But plenty of other brands with massive offline store fleets will also run their promotional event around the same time. Specifically, Walmart Plus Week from July 10 to 13, Target’s Circle Week from July 9 to 15, and Best Buy’s Black Friday in July – from July 10 to 12 – will all run parallel to Amazon’s Prime Day.
Diving into the change in weekly visits since the first full week of May for these three brands indicates that Best Buy is likely to see an especially strong visit boost this July. The company saw its foot traffic spike the week of June 12-28, likely due to its Father’s Day sale. This indicates that shoppers are receptive to the brand’s promotions and bodes well for the retailer’s upcoming Black Friday in July event. Walmart has also seen strong visitation trends recently – perhaps thanks to its reputation for particularly low prices – and may well attract an even greater number of shoppers during its discount event. Meanwhile, Target’s baseline growth has been more muted – but that is heavily related to their high starting point, and with today’s consumers on the hunt for bargains, Target's Circle Week can be expected to drive traffic back to the company’s stores.
The first half of 2023 has brought its fair challenges to the retail space. But as retailers begin busting out the big discounts in July, the tide may be turning ahead of a critical Back to School period.
For more data-driven retail insights, visit placer.ai/blog.