Gen Z accounted for a big push in in-store shopping this holiday season. They went out in groups and enjoyed the experiential aspect of physical stores. We took a look at visitation trends for some of the top brands trending on TikTok to see how they’ve fared this year (below).
Alo opened numerous new stores in 2021/2022 and saw strong growth up til the summer, where it plateaued a bit. However, it saw a huge surge in November, with a bump from Singles Day Promotions Nov. 7-11, and a spike on Black Friday (below).
Levi’s--a name we've analyzed in the past--has been firing on all cylinders, even through some of the inflationary impacts that negatively impacted consumer discretionary spending. It is showing impressive YoY growth, without a negative month in the past 12 months in the retail stores we measure.
Levi’s has also been successful in attracting a wealthier and more educated customer base.
While social media is indeed powerful and gets a lot of press, one thing to keep in mind is that social media appeal has to also be taken in the context of a given trade area’s segment demographics and spending patterns. Alfred Coffee is one brand that has taken social media by storm. Let’s see what happens when the Peet’s Coffee by UCLA gets rebranded to Alfred. An initial guess might be that an Alfred’s that appeals to Gen Z in a college town is a match made in heaven. But upon closer inspection, we see that a brand with elevated price points in a more mixed economic environment may attract a smaller proportion of the potential customers in an area and lose out on traffic volume.
Peet’s Coffee was a Westwood Village stalwart and was open up until the end of 2020. Meanwhile, Alfred opened May 23, 2021. We looked at Alfred for the most recent 6 months and Peet’s in the same exact location 3 years prior. Although both are coffee shops, traffic to Peet’s was 2.5x higher during a similar 6-month period.
What’s happening here? Ultimately, it could come down to the fact that while Alfred over-indexes among a segment such as Ultra Wealthy families (index 116 compared to 97 for Peet’s, according to Spatial.ai PersonaLive data), Peet’s had more universal appeal and attracted a much higher volume of customers across different segments. Peet’s drew twice the volume among Educated Urbanites and Sunset Boomers. Peet’s also appealed to Urban Low Income and Lower Hispanic Families, whereas Alfred under-indexes for those groups.
Another reason for Alfred’s lower volume compared to Peet’s may be due to the opening of Aussie coffee chain Bluestone Lane in Aug 2021 which attracts similar segments to Alfred with similar beverage price points.
Since Alfred and Bluestone attract a similar customer profile, they may be splitting the traffic volume, whereas before Peet’s had those customers to themselves.
What we are ultimately seeing is some of that coffee volume has been shifting to 7-Eleven. Traffic to a nearby 7-Eleven has been steadily increasing, even in the midst of COVID.
7-Eleven is also picking up volume from segments such as Lower Hispanic Families and Near Urban Diverse Families (based on PersonaLive profiles).
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