Consumer foot traffic is a metric utilized to observe the number of customers who enter a retail or business location. Many companies heavily monitor traffic in order to gain insight into the consumer trends that lead to higher sales and revenue, or offer visibility into the physical locations that are most frequently visited.
Businesses looking to establish a new location often study consumer behavior in the area during different times of the day in order to determine the patterns of their potential visitors. Owners, operators, and competitors view foot traffic to a particular store to gain insights into the success of a business within a targeted location.
Aggregated datasets extrapolated from smartphones are able to provide insight into the shopping habits of consumers while protecting their private information. Data scientists, consultants, and business leaders often observe consumer behavior over the course of weeks or months before making a determination on the viability of a particular geographic location.
This article will examine how consumer foot traffic data can offer detailed insight into the positioning of your proposed or current business location while revealing opportunities for future development.
How consumer foot traffic data tells a story about business opportunity
Dataconomy, a top online data publication, reports that foot traffic was first tracked by manual entry methods in the early nineteenth century. Workers at shops and stores counted visitors with the use of handheld counters, corresponding each new customer with the click of a button.
But consumer traffic tracking methods have evolved a great deal since the days of corner apothecaries and tobacconists. It continues to change rapidly, thanks to the dawn of smartphones and their increasing connectivity. The latest methods for tracking consumer foot traffic patterns and shopper counts is now done completely online, with the use of location signals captured by various applications that many of todays’ consumers utilize on their phones. As a result, today’s businesses are able to measure and analyze consumer foot traffic with unprecedented levels of detail.
By tracking aggregated foot traffic counts, patterns in movement, and general trends in migration patterns, businesses are able to ascertain a great deal of wealth from this data. For instance, by studying areas that are increasing in total foot traffic and pairing this with demographic information like income, organizations are able to quickly determine areas most likely primed for growth.
Other business opportunities, like benchmarking against competitors and understanding competitive performance, can also be gleaned from consumer foot traffic intel. Analysis of a competitor’s foot traffic reveals which types of customers are visiting competitor locations, when they’re visiting, and of course, how many. These data points give competitors an insider’s look into the relative performance, capture rate, and effectiveness of that business to pull in shoppers.
Utilizing consumer foot traffic data to measure success
The observation of aggregated data trends are helping many businesses recover in the aftermath of the COVID-19 pandemic. By analyzing factors that influenced unique consumer behavior as a result of a transition to a remote workforce, a subsect of furniture retailers were able to take advantage of the home renovation boom.
Despite the decreased supply and increased pricing of home furnishings, American consumers were not dissuaded from shopping for new furniture. At the onset of the pandemic, many observers in the supply chain assumed the furniture store industry would take a hit due to material shortages and the resulting effect on prices of available items. Although many Americans were spending increased amounts of time at home – looking around their living spaces and considering renovations – some analysts predicted the closure of retailers even as the pandemic waned entering 2022.
As consumer foot traffic analysis proved, Americans were still willing to shop for new furniture – they simply changed how they paid for it.
Retailers that offered rental solutions for new furniture enjoyed a surge in popularity, while the traditional purchase option stores – while still popular – couldn’t keep pace.
The Unacast Tableau Furniture Store Visitation workbook showed that foot traffic reached a peak for both rental and purchase businesses on the week of March 28, 2022, with 2,492,825 unique visitors choosing to shop at Rent-A-Center locations across the United States, as opposed to the 2,087,500 visitors who picked Mattress Firm.
The data shows that a total of 405,325 shoppers preferred the rental option for their furniture that day – a consumer foot traffic metric that could influence business operators entering the space to consider the emerging popularity of the alternative option.
The interpretation of retail foot traffic data offers insights into metrics that could have today’s companies rethinking their business strategy … in a variety of ways.
What foot traffic and site visitation data can tell you
Maybe you’re looking to cause disruption in your chosen industry. You may not be the largest business in the space, but you’re looking for ways you can engage with your audience that will give you a proverbial “leg up” over the competition. Consumer foot traffic, analyzed through a lens other than total site visitation numbers, can point you to competitor strategies you may want to study.
For example, a common use case for using foot traffic data in competitive intelligence is a simple benchmarking analysis. When foot traffic for competing or nearby shops is plotted against the user’s business, a directional conclusion can be made of the relative performance of one business as compared to the others. When aggregated at the brand level, organizations are able to understand relative performance beyond a specific location and get a better understanding of how an overall brand performs against competing brands.
For example, Home Depot may compare and understand that it has significantly higher footfall at shopping center outside of Jacksonville, FL compared to the Lowe’s in the same shopping center. But when aggregated at the brand level, Home Depot may discover that this specific location is not indicative of store performance across the state, and in fact, Lowe’s stores garner greater levels of foot traffic in all of Florida as compared to Home Depot. This knowledge of course has an impact at the business level, affecting whether Home Depot decides to expand or contract its number of locations, run additional marketing campaigns, create partnerships specific to businesses in that state, or expand its product offerings.
In fact, businesses can also leverage foot traffic data to then gain a deeper understanding of their own business performance and enhance their data-driven decisions. Staying with the home renovation industry, aggregated datasets can be used to track the length of the average visit to a retailer. Unacast’s Home Improvement Visit Length Workbook is able to offer businesses insights into the competitor enjoying the greatest customer engagement. Retailers may look to study what leader MSC Industrial Supply was able to offer their consumers, who stayed an average of an hour and a half per visit. Additionally, paired with in-house revenue data, a retailer is able to understand a whole plethora of data points, such as: whether an increase in average shopper time correlates to increases in basket size; or if spikes in visitation during certain times of day has an inverse effect on cart size due to understaffing issues.
Make the most of your consumer foot traffic data
The accurate analysis of foot traffic or location data relies on devices that capture the movement of people from place to place. This data is often collected from the use of cameras, in-store sensors and data sent from mobile devices. If the IoT-enabled technologies that can aid in capturing these analytics are so advanced, what challenges could possibly arise that would impact the accuracy of the metrics themselves?
As it turns out, while the efficiency of data collection is incredibly high, some vulnerabilities remain.
- Targeting confusion. Ascertaining and identifying your ideal consumer should be influenced by the buying power of the demographic in question. Products aimed at younger audiences may utilize consumer foot traffic metrics based on their intended customer, without the analysis of the parent demographics. In some cases, it’s the older generation that will be making the purchase transaction on your product, so be sure to factor them into any analysis of your proposed strategy. In a foot traffic study, devices for both parent and child might enter your target location, but the younger individual may not be the purchaser.
- High-touch retailers. High-volume brick and mortar stores such as Walmart sell a wide array of products, which could potentially “wash out” the intended clarity of your research over a study period. If you’re looking to understand how many shoppers would add your product to their cart during a visit, remember that many datasets will only measure the number of devices entering the location itself – and not the purchases that occur within it.
- Resupply runs. Surely the product your intended consumer enters a store to purchase is the primary reason for their trip, but – in the case they emerge with multiple items – how can you really be sure? If you’re a business that sells items for retailers to add to their shelves, foot traffic analytics could require a degree of dexterity in deployment to accurately determine the metrics you’re searching for.
Seeking the best insight for your business strategy may require enlisting the services of a trusted human mobility insight provider.
Unacast solutions
Foot traffic data is used by real estate, investment and retail professionals in order to understand where visitors are coming from, and where they’re shopping. Merged with demographics data and insight, these aggregated datasets form the forecasting tools that enable your business to determine the best course of action for its future opportunities.
Unacast partners with today’s business leaders to create a bespoke consumer foot traffic tracking strategy. Our data-informed human mobility insights offer you the ability to understand foot traffic to your venues, trade areas and cross visitations.
By analyzing the key metrics related to the migration patterns of your target consumer, you’ll be able to make informed decisions for site selection or deselection. Teaming with our experts will afford you the opportunity to learn how you can boost your competitive advantage.
From site selection strategies that help identify where your ideal visitor demographics mix, to demand forecasting tools that highlight metrics like capture rate, visit duration and customer origin, Unacast’s proven human mobility insights tell you the whole story surrounding your proposed business.
Schedule a meeting to begin a partnership that will result in unprecedented visibility into the metrics that drive your industry.
