The parade of mid-July sales events—Amazon’s Prime Day, Target’s Circle Week, Walmart’s Plus Week and Best Buy’s Black Friday in July—may finally reverse months of lagging foot traffic, according to Placer.ai.
According to a new report from the location analytics platform, more affordable categories like apparel and beauty, typically not Prime Day winners, may see “a significant boost” as consumers look for a reason to shop without overspending.
Of the nine sectors Placer.ai analyzed, only one, beauty and self-care, saw year-over-year growth in weekly visits during the seven weeks started May 1. Apparel, excluding department stores, also saw positive developments, as the year-over-year visit gap shrank from May into June, and visits during the week of June 12-18 rose a modest 1.8 percent.
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“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,” the report’s author, Placer.ai senior vice president of marketing Ethan Chernofsky, wrote. “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.”
Chernofsky noted that though retail foot traffic has lagged this year amid ongoing inflation, holidays have maintained their power to drive traffic spikes, including those not traditionally associated with discounts such as Easter and St. Patrick’s Day. Memorial Day, which is associated with sales events, meanwhile, saw “a relatively subdued increase,” Chernofsky said.
“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,” he added. “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.”
Of Target, Walmart and Best Buy—all of which are running sales events parallel Prime Day—the latter saw the strongest foot traffic gains in May and the first half of June, particularly around Father’s Day, when Placer.ai’s data shows weekly visits up 25 percent year over year. Walmart and Target, meanwhile, experienced gains of around 11 percent and 6 percent during the week of June 12-18. Chernofsky noted Target’s muted baseline growth is “heavily” related to its high starting point, adding that its Circle Week, offering 30 percent discounts on children’s clothes, “can be expected to drive traffic back” to its stores.
“The first half of 2023 has brought its fair challenges to the retail space,” Chernofsky wrote. “But as retailers begin busting out the big discounts in July, the tide may be turning ahead of a critical Back to School period.”
According to a May UBS report from retail analyst Jay Sole, foot traffic started to pick up in April on the Easter holiday, but not enough to offset slower March trends. In U.S. softlines, however, traffic deceleration picked up speed at the end of April
