Government Shutdown Spooks Shoppers in October

SAN FRANCISCO, CA--(Marketwired - Nov 14, 2013) - Euclid, the leader of in-store retail analytics, measured data on nearly 20 million domestic shopping sessions during October, revealing that shopper traffic and intent continued to suffer in the face of the 16 day government shutdown. Positive signs came from improvement in window conversion as some shoppers were enticed by aggressive promotions. We believe that these metrics are indicative of continued volatility for retailers' comp store and total store sales during the month.

Euclid Traffic Index
DECLINED 380 BASIS POINTS YEAR-OVER-YEAR
Traffic in October, defined as the number of devices detected by Euclid sensors at retail locations, decreased 4.5% compared to the previous month. October traffic was also down 3.8% compared to the same month last year. Shopping visits were inhibited by the government shutdown during the first half of the month, and failed to fully recover as consumers are faced with continued economic uncertainty.

Window Conversion
INCREASED 190 BASIS POINTS TO 8.3%
Window conversion in October, defined as the number of shoppers who enter a store as a percentage of the total foot traffic, rose to 8.3% from 6.5% last year, but decreased from 8.7% in September 2013. The improvement in conversion rate over last year is a positive sign that the increased promotional efforts seen during the month are having an influence on the shopping trips that are still occurring.

Bounce Rate
INCREASED 150 BASIS POINTS YEAR-OVER-YEAR
The percentage of shoppers who entered a store but left within five minutes ("bounce rate") was 10.5% in October 2013, up from 9.0% in October 2012. However, the bounce rate has declined slightly from September's high of 11.1%. Although shopper intent is not as strong as last year, it appears shoppers are becoming less inhibited as we get closer to the holiday season. The continuation of this trend will be a positive signal for conversion rates.

Visit Duration
DOWN 5.5% YEAR-OVER-YEAR
Shopping session duration, defined as the mean time from store entry to store exit, was 21.5 minutes in October, a decline from 22.8 minutes last year and 21.9 minutes in September 2013. Shorter shopping sessions during the last two months reveal shoppers have become more deliberate with trips to the store, showing less interest in browsing through extraneous merchandise.

Active Repeat Customers
DECREASED 190 BASIS POINT FROM LAST YEAR
In October, active repeat customers, defined as individuals returning to a store location more than once in 30 days, totaled 11.7% of total visits measured, up 30 basis points from the previous month, but less than the 13.6% seen in October last year. This uptick in shopper loyalty compared to September is a positive sign entering the holidays as we would expect visit frequency to rise. However, shopper frequency has a ways to go to full recovery.

Euclid Holiday Forecasts
We expect holiday sales to rise compared to last year, driven by increased disposable income, a very promotional holiday, and pent up demand from several weeks of depressed spending. Having said this, Euclid predicts that overall traffic will drop year-over-year as the shortened holiday period and continued economic uncertainty result in more focused shopping. Bounce rates will continue to rise and overall visit durations will shrink as shoppers, pressed for time, have less patience for longer lines and less interest in extensive browsing. We also expect a decline in repeat customers compared to last year as a result of the fewer trips to store locations. To respond, retailers looking to attract these shoppers need to focus on more aggressive up-front promotions, stronger in-store visual, heavier staffing during peak periods, and keen attention to out-of-stock events. 

About Euclid
Euclid provides answers and insights to brick-and-mortar retailers in the same way that web analytics services do for e-commerce. Euclid helps retailers optimize performance of their marketing, merchandising, and operations by measuring foot traffic, window conversion, bounce rate, visit duration, and customer loyalty. Euclid collects and analyzes only aggregated, anonymous data. As of November 2013, Euclid's network consists of traffic counting sensors in more than 700 shopping centers, malls and street locations around the United States. During October, the Euclid network measured nearly 20 million shopping sessions across the United States.

If you have any questions about these data, or if you would like to receive Euclid's U.S. Retail Benchmarks, please email usrb@euclidanalytics.com.