The rise of mega-projects such as Hudson Yards and American Dream is one of five trends that defined 2019 and could have a crucial impact in 2020.
That’s according to advanced foot traffic analytics platform Placer.ai, which has released a list of five trends that dominated and changed the retail landscape in 2019 and continue to gain momentum as the industry heads into 2020.
Here is Placer.ai’s take on the five trends.
1. The Rise of the Mega Project
In October, American Dream, the 3 million-sq.-ft. retail and entertainment complex at the Meadowlands in East Rutherford, N.J. opened phase one. And in December, the mega-mall opened Big SNOW – the first and only indoor, real-snow, year-round ski and snow resort in North America. Last week, the Miami Heraldreportedthat the country’s largest shopping center is coming to Miami-Dade in 2025. Mega-projects are rising all over the country and changing the retail landscape and experience.
Placer.ai’s trend analysis: Recent mega-projects’ immediate impact goes far beyond the single project. From Hudson Yards to Essex Crossing to the Boston Seaport, these massive developments drive traffic from locals to tourists and their buzz keeps getting louder. Placer.ai expects 2020 to bring about a variety of new projects and openings to recreate this magic across the country.
2. Store Closures: Retail Apocalypse Vs. Correction
Earlier this month, Coresight Research published their report “Weekly US and UK Store Openings and Closures Tracker 2019” which found “In the US, 9,302 store closures have been announced year to date, compared to 5,844 closures for the full year 2018; 4,392 store openings have been announced year to date, compared to 3,258 openings in 2018.”
Placer.ai’s trend analysis: When major retailers shutter a location, many conclude that the “retail apocalypse” claimed its latest victim. Yet, Placer.ai’s data shows that not all store closures are equal. While stores like Sears and Kmart are struggling, Walmart discovered their superstores were cannibalizing each other and found strategic closings optimized efficiency.
3.Nic(h)e & New: Filling the Retail Vacuum
This past week, the Dallas Morning News reported that just as Nike has built a huge direct to consumer business, newer brands are following their lead. “Big brands with huge consumer ID have been selling directly to consumers for years, but new direct-to-consumer brands are grabbing attention with big advertising budgets.”
Placer.ai analysis: A rising number of product-oriented companies are focusing on expanding their branded retail footprint and they expect it to continue. Stores like Nike, Puma, Lululemon, and Levis are all focusing on their relationships with consumers and using brick and mortar to strengthen online sales.
4. Kings of QSR: Chicken, ‘Holidays’, and Veganism
After the roaring success of chicken wars, it seems the early bird gets the worm. McDonald’s just threw down the gauntlet (or fork) announcing the newest food battle, which we term “Breakfast Wars.” Food and Wine recently reported that “McDonald's will add two chicken sandwiches to the breakfast menu in January 2020.” Now we hungrily await the other fast-food rivals edible response.
Placer.ai predicts the wider QSR sector could be in for a banner year in 2020. Although the fast-casual sector may be suffering, Placer.ai’s data shows this is not the case across the entire QSR space. The Chicken Wars for Popeyes and Chick-fil-A’s led to stratospheric success with foot traffic spikes just under 300% above baseline.
Placer.ai is also keeping an eye on Starbucks as a brand that has leveraged interesting offers to create demand in periods of lesser brand affinity. From a tie-dye Frappuccino to pumpkin spice Lattes, Starbucks has shown a mastery of finding the right mix of gimmick and value to own the calendar in a way many companies could only dream of.
5. Maximized Retail Footprints
Placer.ai’s final key trend is maximized retail footprints. Earlier this year, both Wendy’s and Panera announced moves to expand their menus to more effectively tackle areas that weren’t within their current core strengths. Following McDonald’s lead, they found a way to improve the value created off of these fixed costs.
Another example of this is the experiential retail pushes being led by brands like Lululemon and CVS. The former opened a Chicago location that provides space for classes and a restaurant for a post-workout recharge resulting in much higher off-peak traffic. The same concept drove a powerful idea for CVS’s Health Hubs. Placer.ai data showed that visits were lasting longer and taking place during periods that didn’t align with the national average. This means CVS was driving more visits and driving them during off-peak hours.