As the marketplace looks forward to 2021, Placer.ai has designated several trends that could define how next year unfolds including where and when shopping might change.
For example, the traffic tracker said one factor to keep in mind in thinking about where shopper feet might tread in 2021 is the consumer who is moving back to the ‘burbs.
With the rules of employment changing as working from home becomes a daily or at least a more frequent reality for many professionals, and a renewed appreciation for extra domestic space that could accommodate additional household office and leisure activity, the suburbs have become a more popular option for consumers. The Upper East Side of New York City, for example, has seen 58% of its population, as it stood at 2020’s beginning, remain resident in October. As people added to their home office and leisure-time possessions, anything from desks to patio furniture, space became a greater consideration, as did the relatively peaceful suburban environments in a period of urban tensions.
For retailers, the urban exidous could lead to two different scenarios, Placer maintained: For one, retail brands that had targeted city residents could look into testing suburban formats in order to follow customers who shift residences. Or other brands that have a strong suburban orientation or presence will embrace the new opportunities created by the newly moved. The most likely result will be a combination of both scenarios and nothing is carved in store, Placer related, as anyone who has followed the odyssey of suburban malls recognizes that the retail market outside of cities isn’t exactly stable.
The economic consequences of the COVID-19 pandemic, from job losses to the struggles of small businesses, may have lingering effects for years to come, Placer pointed out. In that kind of environment, traditional grocers, a segment that performed well throughout pandemic, will likely see sustained strength as consumers swap restaurant visits for home-cooked meals.
A wide range of home improvement and refurbishment giants such as Home Depot, Lowe’s and At Home, but also retailers ranging from Tractor Supply to Bed, Bath & Beyond to HomeGoods, could benefit, too. Much of the 2020 surge at such retailers built from increasing consumer time spent in the household. However, Placer indicated, the gains also got support from economic uncertainty, as many individuals chose to invest in their homes rather than to upgrade by moving house.
Value retailers including Dollar General, Big Lots and Walmart will likely benefit as higher income brackets become more interested in value. But this also may apply to Targets as a value player positioned in the middle of the market. Offprice retailers who suffered during shelter in place shopping restrictions should rebound and already have demonstrated much stronger performance than has been evident in the wider apparel sector, Placer observed.
Throughout the pandemic, store visitors showed a proclivity for accomplishing as much as possible with a single visit, which gave big box brands a huge advantage, driving not only store visits relative to other bricks and mortar store operators but also gains in basket size. In 2021, however, Placer suggested that a gradual reduction in coronavirus concern will likely prompt a return of willingness to make multiple stops per outing with a consequential reduction in visit duration. A number of factors will determine how that plays out, but it’s a trend that bears watching, Placer asserted.
The traffic tracker suggested that unknowns, or at least uncertainties, likely to affect 2021 include the extent of the work-from-home population as, if that group remains close to its current extent or grows, may favor malls that incorporate businesses providing professional space such as WeWorks, thus ushering in a new potential customer base likely to take benefit adjacent stores.
For their part, consumers working from home could benefit foodservice operators who provide powerful WiFi, and so become locations that remote workers could seek out as temporary escape from household confinement and they also could prove a boon to broad-assortment neighborhood retailers that can be reached readily before sitting down to work, on a lunch break and in the early evening, such as grocers, drug stores and hardware stores.