In Part II of our 2020 in Hindsight, we’re sharing the three big themes of success we’ve observed in our data over the last year. As consumers changed their priorities and preferences, brands that followed these rules were set up to win against the competition.

Be cheaper

Be closer

Be safer

Our findings show that consumers are trading in for more affordable options, but the biggest driver is value. Ask yourself – “how can I deliver a value-driven experience, but one that comes with less risk?” An example of this is how car sales have remained relatively active during the pandemic, however, luxury car sales have taken a hit. We found that consumers who may have been shopping for a luxury SUV before have decided to shift and now prefer to purchase the top trim non-luxury SUV. Even consumers who may not be directly impacted are focusing more on value, predictability, and minimizing risk. Because things are still very uncertain, that lack of confidence inspires a bit of a “recession” mindset.

Confidence is also starting to change when it comes to being “close”. In the past, we would see devices moving 8 to 15 miles away from their house on weekdays during their commute into their office or work site. However, once the pandemic hit, we started to see people moving an average of 0 to 3 miles away from their homes. Work-from-home changed our daily movement habits dramatically and will be one of the longest-lasting effects as it takes the longest to snap back to normal. Without usual commutes and most people staying home, we saw the average distance traveled to different venues plummet as well. If you were a venue that was in a commercial or even an industrial district, your traffic plummeted because people were no longer being paid effectively to go to those venues. If your outlets were mixed in with the residential fabric, you did quite well. “Be close” also applies to delivery, a business that we saw pick up very successfully in 2020. While you may not be able to simply become closer to your usual target, you can adjust your media and targeting to prioritize those with a location nearer to your venues.  

Lastly, and this counts as much as the other two combined, is that safe, low-touch, outdoor venues are more resilient than others. If there is a chance people think it’s going to be a high-risk area, they tend to avoid it and replace it with something low-risk. We saw this happen plainly in indoor vs outdoor malls, dining, and entertainment. 

What does Cheaper, Closer, Safer look like today?

Three businesses that check all the boxes are Sonic Drive-in, Dollar General, and Motel 6 (or motels in general). Sonic is a perfect example of the importance of safety. If you compare Sonic’s traffic to similar restaurants that aren’t drive-in based (McDonald’s or Whataburger), the competitors had next to 100% of 2019 traffic – very flat and great performance, considering. However, when you look at Sonic, whose business model is entirely about consuming your food in your car, they were up 20% at multiple points throughout the year (and were up 17% the whole year-over-year). People who hadn’t eaten at Sonic for years suddenly decided to revisit Sonic because it was the safest option.

CHART: November Saturdays show 6-month highs

We saw restaurants with drive-ins and drive-throughs skyrocket during this period because of its social distancing infrastructure. It was the obvious, clear choice for people to visit when trying to minimize contact. Another dining business in a similar vein that did well during this period was pizza and pizza delivery. With an affordable family-style format, pizza retained traffic levels, either close or exceeding normal throughout the year. Sonic is also cheaper than your average date night, and it’s closer! It’s not situated in commercial areas but tends to be situated in mixed-use residential areas. As a result, everybody could stay close to home, stay safe, and even save a few bucks while getting out of the house. 

Dollar General did exceptionally well this year – up nearly 20% in terms of total traffic. Consumers remained safe by consolidating their trips to one or two stops rather than visiting five different retailers on their weekend errands journey. This is also a reason that big-box stores did very well during the fourth quarter during holiday shopping. We saw the duration of visits to big-box stores skyrocket while everybody else’s duration was going down. People were buying groceries, household staples, but also gifts for their kids and family – all in one place.

Finally, we have Motel 6. We know general travel and hotel traffic was low, but motels held 80 to 90% of their traffic. For those isolated to certain areas near nature and outdoor venues, traffic was full and even exceeded some 2019 levels. Because traveling was a lot of road trips last year, motels were able to offer value, be nearby to highways and outdoor destinations, and the lack of common space meant you could stay socially distanced. 

Brands like Motel 6, Best Western, Travelodge, and others capitalized on their unique safety proposition, messaged customers about their safety precautions, and captured much more of the travel market in 2020. 

Leading into the second reemergence

As out of home movement crept up, it was redistributed to the categories that were cheaper, closer, and safer than the alternatives. With different priorities and preferences, consumers focused on experiences at home, outdoors, and online. We’ve shared that people are doing more investment in their homes to become more habitable and pleasant. Home Depot, Lowe’s, Sherwin Williams, Ikea all received an increase in traffic helping us to finish all our ‘quarantine projects.’

People invested their time and money at outdoor facilities as the new default entertainment activity. Golf courses had their best traffic in years, hiking trails were packed, beaches were full, campgrounds were crowded, but theme parks and gyms remained empty. Purchase data supports this. For example, it was incredibly hard to buy bicycles and other outdoor activity items; RV rentals were also impossible for many.

A second reemergence is in the works during Spring 2021, the warm weather is returning and social distance adjustments made by businesses have more people out and about again. Our location data findings from Q1 indicate that reemergence is still very regional and cultural, returning at different rates. Be on the lookout for our next blog, SDT: Learnings from our second reemergence to learn more about the recent uptick in traffic as we head into Q2 2021.

To recap 2020 in hindsight, the three things you need to remember are:

  1. Success comes to those who are cheaper, closer, and safer than their alternatives.
  2. Consumers are spending for better experiences at home, outside, and online.
  3. Finally, re-emergence is regional and driven by many factors including work from home, distance learning, income, culture, vaccines, and case counts.

Our team is here to help you and your business navigate your way through 2021 and beyond with location intelligence. To make sure you’re reaching customers based on their comfort level, check out our new audiences made for the socially distant consumer – or reach out to our team for custom recommendations.

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