For those of us interested in the retail space, foot traffic, or simply business in general, the closure of major retail stores like Sears and Kmart is a big deal. Both rank in the top 10 for visit share in the “Department Store” category. That’s a lot of visitation, so as their presence diminishes, other stores stand to gain considerable business. To get an idea of where that might be, we can use Placed Insights to examine two key visitation metrics: customer overlap* and customer affinity.**
While Sears and Kmart are not completely similar (Sears is a mall-based department store while Kmart is geared toward bargain shoppers), they do share a lot of visitation with two other major department stores. Among Sears, Kmart, JCPenney, and Kohl’s, we saw customer overlap between roughly 19-25% last quarter. It wouldn’t be surprising to see more shoppers turn to these stores after Sears and Kmart close.
More specialized stores may also see an increase in foot traffic. Sears is known for carrying a broad range of products including electronics, appliances, lingerie, and athletic shoes. Three distinct competitors with significant customer overlap or customer affinity with Sears includes Best Buy (27%), Victoria’s Secret (20%) and Finish Line, which has a 1.53 Customer Affinity index with Sears.
Dollar-branded stores such as Dollar Tree and Dollar General both stand to gain Kmart foot traffic. Both are in the top 3 in terms of customer overlap, with 37% and 24% respectively. Discount retailers Five Below and Big Lots may also gain customers, as they have a Kmart Customer Affinity Index of 1.26 and 1.23 respectively.
*Customer overlap is the percentage of all visitors to one business (i.e. Sears) that also visited a second business (i.e. Kohl’s) in a given time frame.
**Affinity Index is the likelihood that a given population (i.e. Autozone shoppers) also visited another business (i.e. Whole Foods) in a given time frame, compared to the general U.S. population. For example: if Autozone shoppers have a Whole Foods Affinity Index of 1.50, it means Autozone shoppers are 50% more likely to visit Whole Foods in the given time frame than the general U.S. population.