The Coresight Research US Retail Traffic and In-Store Metrics series reviews year-over-year changes in selected store-based metrics as reported by RetailNext. In this month’s report, we review store traffic changes through December 2020, when many states reinstituted stay-at-home orders and travel restrictions owing to a spike in Covid-19 cases. RetailNext’s coverage does not include food retailers but does include some other retail sectors deemed essential; the exclusion of food retail means that the figures cited below almost certainly overstate recent declines in total retail traffic. These traffic trends support Coresight Research’s expectations for a sustained, strong increase in e-commerce.

• December saw a slight improvement in traffic trends: Traffic declined by 36.4% year over year in December versus November’s 37.0% decline.
• The conversion rate (sales transactions as a percentage of traffic) grew by 5.2 percentage points in December, higher than November’s 3.9-percentage-point growth.
• In December, ATV (sales divided by transactions) increased sharply by 7.2%, versus November’s 1.0% growth.
• Shopper yield (sales divided by traffic) grew 27.7% in December versus November’s 24.4% increase. With last-minute holiday shoppers rushing to stores, week four observed the highest shopper yield, of 37.9%.

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Figure 1. US Store-Based Nonfood Retail Metrics: YoY % Change [wpdatatable id=691 table_view=regular]

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ATV=average transaction value; Shopper yield= Sales divided by traffic *Black Friday weekend comprises November 27–29 Source: RetailNext Weekly Shopper Traffic Trends Weekly data for December tracks the progress of store traffic over five weeks (November 29, 2020–January 2, 2021):

• Traffic declined by 30.9% in the first week of December, representing a sharp deceleration from the final week of November, which saw a traffic decline of 41.3%. However, traffic declines accelerated to 32.9% in the second week of the month. Saturday, December 12 comprised the largest percentage of December’s total traffic.
• Declines accelerated further in the third week of December to 40.7% before slightly easing to 38.2% in week four, which included two additional days before Christmas and saw last-minute holiday shoppers visiting stores, with traffic on Christmas Eve outperforming weekly trends with a 34.6% decline.
• Declines eased further to 32.4% in the fifth week of December, due to post-Christmas sales and shoppers redeeming gift cards. December 26 was the second-largest day of traffic in December.

Traffic by Retailer Vertical While nonessential retailers were severely impacted in March and April by temporary store closures due to Covid-19 lockdowns, traffic improved between May and September, with most states authorizing retailers to reopen physical stores in stages. However, traffic trends slowed in October and November. In December, traffic trends slightly improved: Nonessential retailers experienced an aggregate 36.4% decline in shopper traffic versus November’s 37.0% decline. Performances varied across industry verticals in November:

• The footwear sector experienced the greatest traffic decline at 37.1%, followed by the apparel sector, which saw a 35.8% decrease in traffic.
• The home sector posted the lowest decline in traffic, at 34.2%.
• The jewelry sector reported a traffic decline of 34.5%.

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Figure 2. US Retail Traffic by Industry Vertical: YoY % Change [wpdatatable id=692 table_view=regular]

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Source: RetailNext Regional Traffic Trends December witnessed record levels of Covid-19 cases across several states, primarily due to the effects of Thanksgiving and Christmas travel. With a record number of daily hospitalizations and deaths, and an overwhelmed hospital system, California became the new epicenter of the Covid-19 virus, severely impacting the traffic trends in the West. The South also observed a surge in cases and accounted for a large portion of new infections. The Midwest experienced a slowdown in cases after the third wave in November, but many states have been struggling with vaccine distribution. With the spread of a new strain of Covid-19 throughout the country and a slowdown in vaccine distribution, the traffic trends are likely to be impacted in early 2021. Retail traffic in December varied across regions:

• The West was the worst-performing region, posting a traffic decline of 41.5%. The region was heavily impacted by the surge in Covid-19 cases in California and statewide shelter-in-place restrictions.
• The Northeast, the second most challenged region, posted a traffic decline of 39.3%. In the first week of December, traffic trends improved by 10 percentage points over the end of November. However, traffic trends deteriorated as the month progressed, with the third week of December witnessing a traffic decline of 45.4%. The last two weeks observed a relatively flat traffic decline, at 39.5%.
• The Southposted the lowest decline in traffic, at 30.1%, outperforming other regions every week in December. The first two weeks saw traffic decline by 27.4% and 27.9%, accelerating to 34.4% in week three in the lead-up to Christmas. Weeks four and five saw improved performance, with the traffic decline easing to 31.5% and 25.8%, respectively.
• The Midwest saw a traffic decline of 34.6% for the month. With the highest number of Covid-19 cases heading into December, this region saw the worst traffic decline in the first week of the month, at 35.2%. However, the Midwest was the second best performing throughout the remaining weeks of December—week five saw a traffic decline of 28.4%.

Traffic by Retailer Location Type In December, mall traffic outperformed non-mall traffic, declining by 34% compared to the non-mall traffic decline of 37%. Mall traffic was comparatively consistent across different location types. Non-enclosed storefront locations continued to perform better than traditional enclosed shopping centers.

• Traffic by mall location type declined by between 22% and 60%, with strip malls outperforming other location types by more than 12 percentage points, with a decline of only 22.4%; these benefited from being open-air centers and the presence of nondiscretionary retailers such as food retailers.
• Lifestyle center, outlet and traditional mall locations witnessed traffic declines of between 37.5% and 42.9%. Street-front and freestanding locations witnessed a decline of 35.1%, while luxury locations saw a decline of 50.8%.
• Other retail locations including airports, casinos and hotels were hit the hardest, with traffic declines of more than 55%, owing to travel restrictions as well as consumer preference to avoid travel.