Welcome to the 8th edition of the PlaceIQ Social Distance Tracker.  

Our PlaceIQ team in the Bay Area has been sheltering in place for a month now. On March 16th, six Bay Area counties gave the first orders, which have now spread to 42 states. With a month behind us, what have we learned? People radically changed the way they live nearly all at once. We know COVID-19 drove this, but how did these changes take place?

In today’s issue we’ll take the high view and try to make sense of what happened to foot traffic over the last month, and make a prediction about how it will slowly return to form.

We are gratified to see our analyses being included in various reports, since it is our goal to contribute to the #dataforgood effort. If you choose to re-use one of our analysis, all we ask is that you attribute the analysis or content to PlaceIQ. Thank you!

From Panic & Prepare to the Quarantine Routine

While it certainly felt hectic, with hindsight, the data shows the last month of foot traffic neatly divides into two phases:

CHART: % Change in Foot Traffic Volume vs. Pre-COVID Norms
  1. COVID-19 becomes real for many on 3/11, when the NBA suspends its season and we learn Tom & Rita Hanks are ill.
  2. Traffic to big box & grocery spikes as people prepare for the possibility of sheltering-in-place.
  3. Airport traffic hits 20% over its average as people scramble home.
  4. Large offices announce work-from-home policies ahead of official state orders.
  5. On 3/20, California is the first state to announce shelter-in-place orders.
  6. Traffic to big box and grocery falls below average on 3/19, and hits lows on 3/21 as the surge to stock-up completes.

We’ve pulled some select categories to best illustrate our transition to a shelter-at-home world. Like all major changes, there was a fierce transition period where everything was up in the air. This was the Panic & Prepare phase. It lasted about 10 days, and kicked off Wednesday, March 11th with the NBA and Hanks announcements. Spurred by these cultural cues, foot traffic both spiked and fell massively the next day — depending on the category. Traffic thrashed around for a few days as people scrambled to prepare, then settled down to new lows.

From these lows, essential businesses started to rebuild a foot traffic routine. Traffic found a weekly rhythm as people learned to live while sheltering-in-place. We refer to this phase (the phase we’re in now) as the Quarantine Routine. Traffic is predictable, though significantly lower. We can plan, market, and optimize without having to contend with major contextual headwinds masking our efforts.

CHART: The Pre-COVID Weekday Foot Traffic Routine and The Shelter-in-Place Foot Traffic Routine

Don’t Count on a Formal Order Snapping Us Back to Normal

With nearly a month of hindsight, it’s easier to calmly analyze the Panic and Prepare phase. With that calm, a dominant -and interesting- insight emerges: nearly all of the foot traffic volume lost over the last month happened before any formal shelter-in-place orders were issued by state or county governments. 

This sequence is best illustrated with a plot by Allison Green, a Princeton Economics graduate student, who has been working with our data as part of a larger team led from UC Berkeley’s Haas School of Business:

CHART: New Jersey Adjusted DEX over Time

The Y-axis on this chart measures the amount devices associated with each other (by visiting the same place at the same time). The team calls this metric “device exposure index”, or “DEX” for short. As we can see, DEX drops significantly in New Jersey – ahead of a State of Emergency being issued – and nearly bottoms out before non-essential businesses were closed. Social distancing kicked in before formal orders.

Cultural cues appear to have snapped most of us into shelter-in-place mode. The formal orders brought in the laggards. We need to keep this recent history in mind as we plan for, “opening up America again.” Populations aren’t likely to rush out due to formal measures. People will trickle out, waiting for cultural cues (locally or nationally) that it’s safe to return to form. This transition will take time. And unlike the Panic & Prepare phase in March, it looks like these transitions will have different schedules in different regions. 

As such, we recommend that businesses prepare for a gradual transition. Measures taken to adapt to the Quarantine Routine should remain in place even as old ways of business return. Data detailing regional trends will become critical for preparation and allocation of resources as the next transition plays out on different schedules across the nation. 

Ethically Providing Movement Data to Researchers

One of our goals for the social distancing tracker is to stay in our lane and provide #dataforgood to the experts who can unlock it for public benefit. Before COVID-19, PlaceIQ used location intelligence to understand consumer behavior. After COVID-19, we aim to fulfill the same role. While we do have PhDs in our company that work on our data, none of us are experts in public health or disease transmission. Therefore, you’ll notice our purposeful intention to not add to the noise on social media, make public appearances, or “point fingers”. 

In recognizing the value our data can provide to the actual epidemiologists, public health officials, and economists thinking about how to best deal with COVID-19, we’ve taken the step to provide our data to a team composed of numerous universities well suited to preparing, documenting, and presenting it to the wider research community in a privacy-safe manner.

If you’d like to learn more about this, or download the data yourself, take a look at the team’s public Github repository available for all researchers to use. 

We thank the talented academic consortium led by Victor Couture, Jonathan Dingel, Allison Green, Jessie Handbury, Kevin Williams, Hayden Parsley, and Serena Xu for their efforts.  We are humbled to be part of this effort.

Travel & Entertainment Foot Traffic

There’s not much going on in this category during the Quarantine Routine, but we do want to call attention to one story that has so far flown below our radar. To date, we have been aggregating all hotel foot traffic into one figure. But it appears there’s a bit of a relative bright spot for budget hotel brands:

CHART: % Change in Foot Traffic vs. Pre-COVID Norms, 7-Day Moving Average

Luxury hotels, dependent on discretionary vacations and budgets, are down over 90% from their pre-COVID norms. But budget hotels, whose business is often more diversified across a range of occasions, are faring a third better than their expensive counterparts.

New York Magazine’s Intelligencer covered this story earlier this week:

“More economical hotels are losing business, too — lots of people stay at Motel 6 on vacations or on the kinds of business trips now getting canceled — but they have other use cases that are holding up better. Truckers are still on the road. Some first responders need a place to stay near where they are working. And the crisis has created a new category of hotel business: people staying in hotels in order to achieve physical separation from others in their household…

 

“It’s mostly local,” said Z.B. Mohan, the general manager of the Holiday Inn Express JFK Airport, when I asked who’s staying in his hotel these days. “Maybe someone in the family wants to quarantine or stay away from family. Some people are stuck from the airport, missing connecting flights because they arrive at the airport and the connecting flight is canceled.””

One lesson we strongly believe will be learned from all of this is the importance of diversification. Great efficiency and deep understanding comes with staying focused on a single use case, customer, and/or product. But this strategy struggles when confronted with black swans. Hotels with many types of customers are doing okay, much like restaurants whose model already offered food for dine in, delivery, and pick-up.

Dining Foot Traffic

As we’ve covered, every restaurant is now a drive-through. Those least like a drive-through (like Casual Restaurants) are faced with a tough choice: do they invest in reshaping their businesses to adapt to a prolonged Quarantine Routine or do they ride out the disruption and save their cash? A month in, it looks like many are attempting to ride it out. Casual restaurant foot traffic, though many locations are open for pick up, is down at the level of airports:

CHART: Changes By Category

Our analysis continues to suggest that the conversion to drive-through for non-fast food brands, coupled with the removal of the workplace and commute from many daily routines has put significant challenges in front of many fast casual brands. Many are starting to roll out innovative measures (like Panera and Potbelly’s grocery services), indicating their willingness to invest in adapting to the new routine. We’ll continue to watch fast casual closely.

Traffic metrics for retail, auto, pharmacy, work life, and more are available for download below.

""
Subscribe to our newsletter to receive these analyses weekly.