As Sears and Kmart stores close, where will their shoppers go?

Where will shoppers go if Sears and Kmart close?

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.**

Department Stores

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.

Specialized Stores

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.

Discount Stores

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.

Placed and Kantar Release Third Annual Black Friday Report

Black Friday has been a long-standing American pastime, one that creeps closer and closer into Thanksgiving every year. For many Americans, it is accompanied by images of people shoving and trampling each other to get their hands on the hottest discounts, giving a redefined meaning to the term “door-buster.” And, according to the NRF, nearly 102 million consumers shopped in brick-and-mortar stores over the Black Friday holiday weekend this November, where the retail advertising buildup beforehand represented a billion plus dollars.

 

So, the decisive question remains—who were the retail winners and losers in the ultimate annual competition of reaching those 102 million consumers effectively? Placed and Kantar came together again to merge their intelligence and evaluate the amount of incremental store visits per dollar of advertising, measuring the success through the metric of ‘lift visits per ad dollar.’ This measure was then converted to an index scale, assigning an index of 100 to the highest lift visits per ad dollar and scaling all other values against it.

 

This year’s analysis revealed that consumers are on the prowl for the latest and greatest electronics, particularly when it comes to Black Friday deals. Best Buy came away as the winner: with $24.2 million of ad expenditures, Best Buy experienced a 125% lift in store visits, obtaining the top efficiency index of 100. In second place behind Best Buy comes JC Penney with an efficiency index of 75, claiming the top spot for the department store and mass merchandiser category. And when it came to the battle of Walmart vs. Target, it was pretty close: Walmart experienced an efficiency index of 65, with Target on Walmart’s tail with an index of 63.

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The digital cousin of Black Friday, Cyber Monday has stolen some of the holiday shopping spotlight. Regardless, the 2015 findings highlight that pre-Thanksgiving advertising spend remains not just important, but actually successful in generating foot traffic—proving the reality of holiday retail: Black Friday isn’t dead, it’s just different. Download the full report here to learn more.

Placed 100 November Update Reveals Big Retail Movers

The November Placed 100 was released today highlighting last month’s big movers in terms of foot traffic. November is always a critical month given Black Friday and the holiday shopping crush.  Not surprisingly, many of the businesses with the biggest jump in the store visit rank were retailers.

 

Leading the charge was American Eagle Outfitters, who not only cracked the top 100 for the first time, but did so by moving up 17 positions to number 84.  A host of other fashion retailers were also big movers including JC Penny (+17), Victoria’s Secret (+16), Marshall’s, Ross and Old Navy.  Toys also made a big push as Toys ‘R’ Us was up 16 spots, also cracking the top 100 for the first time.

 

Foot traffic to stores selling electronics, the ever-popular holiday gift, were up across the board, led by Best Buy (+8), GameStop (+7), and mobile phone providers T-Mobile, Verizon and Sprint.

 

Dropping in the store visit rankings this month were quick serve restaurants like Dairy Queen (-15), KFC (-10), and Domino’s Pizza (-9).  Thanksgiving dinner this year, apparently was all home cooking.  Travel related business such as gas stations and hotels saw declines in foot traffic, following the end of the busy summer travel months.

 

View the full Placed 100 to see the other big movers last month.

 

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Placed and Kantar Release Second Annual Black Friday Report

This post is adapted from analysis written by Jon Swallen, Chief Research Officer, Kantar Media Ad Intelligence.  

Access the full analysis

 

Placed and Kantar once again partnered to deliver the definitive Black Friday study measuring the impact of television advertising on driving customers into stores.  The findings highlight the importance of pre-Thanksgiving advertising spend on generating foot traffic during this critical weekend.

 

As in any contest, some competitors do better than others.  The results of this year’s study are no exception as mega-retailer Walmart used their massive scale to both outspend and outdraw its rivals.  Spending north of $70 million, Walmart not only drew a 38% share of in-store shoppers but did so at the lowest cost per share of any retailer in the study.

 

By contrast, Target spent nearly as much as Walmart but drew nearly 2/3 less visitors over the 4 day period (a 13% share).  It wasn’t all bad news for Target, however, as store traffic was up nearly 22%  vs. the week prior.

 

Download the full report here.

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