Welcome to the 18th edition of the PlaceIQ Social Distance Tracker.
In our last edition, we reviewed the Reemergence Ramp: the post-COVID phase in which we currently find ourselves. We reviewed which categories were reemerging, and where, as well as which categories still remain negatively impacted.
When looking at velocity and recovery, most categories fit neatly into three clusters. Those locations still empty included Entertainment, Offices, Airports; those beginning reemergence included Shopping Malls and Hotels; and those steadily reemerging included Fast Casual Dining and Coffee Shops. However, there were a couple outliers – and one category we’ve found intriguing is Auto. Today, we’ll be looking at Auto’s unique visitation trends, and what we can expect from their recovery.
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Outlier Categories Return at Their Own Pace
In this graphic, we’ve segmented categories by their recovery and velocity to illustrate how far away a category is from its pre-COVID norms, and how quickly it is approaching that recovery. With this visualization our metrics correlate very well and our categories cluster nicely – except for fast food restaurants, auto dealerships, and pharmacies. These businesses are outliers.
We have our theories on fast food. It’s easy, affordable, and safe to visit for drive through or pick up. Pharmacies are making their way back, slowly, as people prioritize necessities.
So, we asked the question: what’s going on with auto dealerships?
The Continued Reemergence of Dealerships
Dealership foot traffic growth is not stopping:
In our discussions with auto business experts, we are seeing support for several factors driving this resurgence:
- Demand for new cars didn’t stop when dealerships couldn’t sell cars for nearly two months. That demand was put on hold before suddenly being released when showrooms reopened.
- Continued avoidance of public transportation is driving people to new transportation solutions, including car purchases. We know that public transit traffic is down and growing slowly. Anecdotally and quantitatively, it’s hard not to see these two trends being related.
- Many car purchases are being moved forward to accommodate travel to local Summer vacation destinations. The road trip is resurgent as people continue to avoid airports.
The big question on our minds is if this traffic growth will continue, stall, or decline as immediate demand is flushed from the market. We believe that demand will continue in the short term, as this growth varies significantly by county. For example, here is Texas:
Green counties have positive year-over-year foot traffic figures while red counties have negative figures. Urban areas have less foot traffic, overall, when compared to rural counties. If our #2 and #3 theories for resurgence (avoidance of public transit and local vacation plans) are correct, we expect demand to continue to manifest especially in urban areas. We will continue to monitor this trend to validate our theories.
Monitoring reemergence at the local level will help auto brands understand where traffic is coming back, and how to focus their messaging. We know that reemergence is regional and varies significantly by county. The category charts we’ve shared, breaking down recovery and velocity, largely take the same varied shape from region to region. But this Auto analysis brings into sharp focus that the magnitude of each metric will continue to vary significantly when we get down to local levels. Construct national strategies at your own peril.
As always, thanks for joining us today. If you have any questions or comments, please send them our way. We enjoy hearing from you.
July 2021 PlaceIQ Social Distance Tracker unpacks the path back to normal traffic and behavioral differences between high and low vaccinated US counties.
This PlaceIQ Social Distance Tracker outlines how reemergence doesn’t mean an end to consumer complexity and discusses the return of shopping behaviors.
This PlaceIQ blog takes the main findings from our webinar with PwC to explain how demand models have changed, and how it affects your planning in 2021.